Bajaj Auto Exploring Ways To Participate In KTM Restructuring
Bajaj Auto BV has raised €566 million as a one-year unsecured loan from three banks ahead of KTM's restructuring deadline on May 23.
A wholly owned unit of Bajaj Auto Ltd. is in "negotiations and exploring ways" to participate in the restructuring of KTM AG, according to an exchange filing on Monday, amid media reports that it has secured a loan to pull the Austrian out of bankruptcy.
"We would like to clarify that our wholly owned subsidiary, Bajaj Auto International Holdings BV, Netherlands, is in negotiations and exploring various alternatives to participate in the restructuring of KTM AG, pursuant to a plan approved by its creditors," the filing stated. "The involvement by Bajaj Auto BV in the restructuring as well as arrangements in this behalf are being finalised and the company will make necessary disclosures at the appropriate time."
Bajaj Auto BV holds a 49.9% stake in KTM parent Pierer Mobility AG.
On Saturday, NDTV Profit reported that Bajaj Auto BV has raised €566 million as a one-year unsecured loan, a week ahead of KTM's restructuring deadline. Consequently, the Bajaj Auto stock surged on Monday.
The Duke maker has to submit a cash quota of €548 million by May 23 as part of an insolvency resolution process. In all, KTM needs €800 million to pay creditors and increase production at Mattighofen.
The reporting was not without precedence. Since KTM declared bankruptcy in November 2024, Bajaj Auto BV has infused €200 million over four tranches of €50 million each.
Since February, Bajaj Auto has infused a total of €275 million into its Netherlands-based investment vehicle to help KTM restart operations. On May 16, it informed the stock exchanges about the €566-million loan from three banks.
Complex Holding Structure
Pierer Bajaj AG is a joint venture of former KTM CEO Stefan Pierer (50.1% stake) and Bajaj Auto International Holdings (49.9%). Bajaj Auto Managing Director Rajiv Bajaj is on the board of Pierer Bajaj AG.
Pierer Bajaj AG holds 74.9% stake in Pierer Mobility AG, the Vienna-listed firm that has KTM AG as its wholly owned subsidiary. KTM AG, in turn, owns motorcycle brands such as KTM, Husqvarna and GasGas, as well as the eponymous MotoGP team.
It is still unclear whether Bajaj Auto will pick up a majority stake in KTM in lieu of the fund infusions or bring in an outside investor to buy out Stefan Pierer's share in the company. Things may become clearer when it declares its fourth-quarter results on May 29.
On Monday, Bajaj Auto shares closed 4.23% higher at Rs 8,846.05 apiece on the BSE, compared to a 0.33% decline in the benchmark Sensex.
