Bajaj Auto Unit Gives Rs 480 Crore To KTM For The Fourth Time This Year
KTM AG, in which Bajaj Auto holds 49.9% stake via an overseas subsidiary, has to deposit a cash quota of €548 million by 23 May to stave off bankruptcy.
A unit of Bajaj Auto Ltd. has infused 50 million euros (about Rs 480 crore) into KTM AG for the fourth time since February, even as the Austrian bike bikemaker looks to stave off bankruptcy.
Bajaj Auto International Holdings BV, the Netherlands-based subsidiary of the automaker, has subscribed to convertible bonds of 50 million euros issued by Pierer Bajaj AG on Thursday, according to an exchange filing on Thursday. The money “will facilitate the funding needs of Pierer Mobility AG’s subsidiary KTM AG, as required for its restructuring process”.
The investment consists of 500 bonds worth 100,000 euros each. They can be converted into shares of Pierer Bajaj AG between June 2025 and February 2028. The fund infusion is a related-party transaction and carried out on an arm’s length basis.
Complex Holding Structure
Pierer Bajaj AG is a joint venture of KTM’s former CEO Stefan Pierer (50.1% stake) and Bajaj Auto International Holdings (49.9%). Bajaj Auto MD Rajiv Bajaj is on the board of Pierer Bajaj AG.
Pierer Bajaj AG holds a 74.9% stake in Pierer Mobility AG, the Vienna-listed firm which has KTM AG as its wholly owned subsidiary. KTM AG, in turn, owns motorcycle brands such as KTM, Husqvarna, GasGas and CFMoto, as well as the eponymous MotoGP team.
In November 2024, KTM AG declared bankruptcy over debt and inflated inventory.
Investment History
On Feb. 21, Bajaj Auto infused 150 million euros in Bajaj Auto International Holdings. Of this, 50 million euros was extended as a loan to KTM AG to restart operations. On Feb. 25, KTM’s creditors approved a restructuring plan under which 548 million euros had to be submitted by 23 May.
On March 17, KTM restarted production at its Mattighofen, Austria-based plant. Then, on March 31 and April 3, the company received two more tranches of 50 million euros each from Bajaj Auto International Holdings by way of convertible bonds.
On May 15, Bajaj Auto invested a further 125 million euros into Bajaj Auto International Holdings. Almost immediately, 50 million euros more was infused into KTM AG.
In all, Bajaj Auto has infused 200 million euros into KTM since the bankruptcy. KTM needs a total of 800 million euros to finance the cash quota of 548 million euros and increase production.
It’s 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.
