Bajaj Auto Unit Secures €566 Million Loan Before KTM Restructuring Deadline
KTM AG, in which Bajaj Auto BV holds 49.9% stake, has to pay creditors €548 million as part of a restructuring process.
Bajaj Auto International Holdings BV, which holds 49.9% stake in the bankrupt KTM AG, has secured a €566 million loan, one week before a restructuring deadline.
The Netherlands-based investment vehicle has executed loan agreements with JPMorgan Chase, DBS Bank and Citigroup to raise a total debt of €566 million, or Rs 5,431.08 crore, according to an exchange filing on Friday. The loan will be used for funding its “investment activities”. It’s an unsecured loan for a term of one year.
The transaction comes a week ahead of KTM AG’s restructuring deadline. On 23 May, the Austrian bikemaker has to pay creditors €548 million to stave off bankruptcy.
Rescue Operations
On 29 November 2024, KTM filed for bankruptcy citing its inability to service debt that ran into billions of euros. The company had accumulated the debt by acquiring MV Agusta and spending over its MotoGP team. Around the same time, two-wheeler sales collapsed in Europe. That resulted in an inflated inventory.
On 21 February 2025, Bajaj Auto infused €150 million in Bajaj Auto International Holdings. Of this, €50 million was extended as loan to KTM AG to restart operations. On 25 February, KTM’s creditors approved a restructuring plan under which a cash quota of €548 million had to be submitted by 23 May.
On 17 March, KTM restarted production at its Mattighofen, Austria-based plant. Then, on 31 March and 3 April, the company received two more tranches of €50 million each from Bajaj Auto International Holdings by way of convertible bonds.
On 15 May, Bajaj Auto invested a further €125 million into Bajaj Auto International Holdings. Almost immediately, €50 million more was infused into KTM AG.
In all, Bajaj Auto has infused €200 million into KTM since the bankruptcy. KTM needs a total of €800 million to finance the cash quota of €548 million and increase production.
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 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 and GasGas, as well as the eponymous MotoGP team.
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 29 May.
On Friday, Bajaj Auto shares rose 1.91% to Rs 8,487.15 apiece on the BSE even as the benchmark Sensex ended the day 0.24% lower at 82,330.59 points.
