Bajaj Auto Moves To Take Control of KTM, Injects 800 Million Euros To Revive The Brand

NDTV

22-05-2025

In a bold step that signals a major shift in its global two-wheeler ambitions, Bajaj Auto is set to take control of the iconic Austrian motorcycle brand KTM. This strategic move comes through its Netherlands-based subsidiary, Bajaj Auto International Holdings BV (BAIHBV), and is aimed at rescuing and revitalising the debt-laden KTM group. Pending regulatory approvals, Bajaj will transition from a passive minority investor to the majority stakeholder in KTM's parent structure. The acquisition marks a turning point in Bajaj's near two-decade-long partnership with KTM, which has seen the Indian manufacturer play a pivotal role in developing, producing, and exporting KTM motorcycles from India to over 80 countries.
The Deal: A Rescue Package and Ownership Shift
To revive the struggling Austrian brand, Bajaj has arranged a comprehensive €800 million (approximately Rs. 7,200 crore) debt funding package. Of this, 200 million Euros have already been infused in tranches since FY2024 to maintain business continuity. The remaining 600 million Euros is now being deployed to fulfill creditor obligations and reboot operations. Out of this 450 million Euros will be a secured term loan by BAIH BV to KTM AG and the rest 150 million Euros will be issued as convertible bonds by PBAG and will be subscribed by BAIHBV, that will be loaned by PBAG to PMAG and the funds will be eventually used to pay off the balance amount of creditors' quota and restart costs.
This financial intervention is part of a court-approved debt restructuring process in Austria. KTM and its key subsidiaries-KTM Components GmbH and KTM F&E GmbH-had entered a self-administration phase in late 2024, triggered by severe liquidity issues and operational bottlenecks.
Key Milestones in KTM's Restructuring
On November 28, 2024, KTM AG formally applied for judicial restructuring in Austria.
On February 25, 2025, creditors approved the restructuring plan, which included a one-time 30 per cent cash payout to settle claims.
The deadline for depositing this payout with the court-appointed administrator is May 23, 2025. If successful, the court will finalise the restructuring by mid-June 2025, paving the way for KTM's revival.
To avoid a complete insolvency, Bajaj has now stepped in with the required liquidity. The funds will be placed into escrow accounts for creditor payouts, while production and supply chain activities, which had been halted, are set to restart.
Structure of the Bajaj-KTM Transaction
Bajaj Auto currently holds an indirect 37.5 per cent stake in KTM's listed parent, Pierer Mobility AG (PMAG), via a chain of investments. The planned acquisition will give Bajaj controlling interest in Pierer Bajaj AG (PBAG)-the Austrian holding entity that owns a 75 per cent stake in PMAG. Interestingly, Bajaj has also assumed responsibility for an 80 million Euros loan initially taken by a Pierer group company. This move prevented a potential loan foreclosure that could have jeopardised the entire restructuring plan.
Once necessary approvals are in place, Bajaj plans to:
Reconstitute the board and governance structure at KTM
Launch a comprehensive turnaround strategy
Expand the joint product development program between India and Austria
Explore new partnerships to drive technology leadership and long-term growth
With this decisive action, Bajaj Auto is positioning itself at the forefront of the global premium motorcycle segment. The move also reaffirms the Indian manufacturer's long-term commitment to KTM and its ambitions to shape the future of high-performance motorcycling in India and in other global markets as well.