Bajaj Auto To Take Control Of KTM In €800-Million Rescue Deal

Bajaj Auto Ltd. has decided to take control of KTM AG by way of rescue package valued at €800 million (about Rs 7,760 crore) for the bankrupt Austrian bikemaker.

The package includes a €450 million secured term loan to KTM and €150 million in convertible bonds issued by Pierer Bajaj AG, according to an exchange filing on Thursday. As much as €200 million has already been infused in KTM and the remaining is being deployed now.

Consequently, Bajaj Auto International Holdings BV will increase its stake from 49.9% to a sole majority shareholding.

The proceeds will be used to pay off creditors under KTM’s court-approved debt restructuring plan in Austria and inject fresh capital into the firm's operations and working capital cycle.

Bajaj Auto BV is also taking over commitments of a Pierer group company over loan and share pledge agreements with Dabepo Holding, which along with interest and costs adds up to €80 million.

The equity ownership realignment and change of control will be effective only after regulatory approvals.