A unit of Bajaj Auto Ltd. has picked up another loan to fund its rescue plan for KTM AG that's undergoing bankruptcy proceedings in Austria.
Bajaj Auto International BV, the Netherlands-based investment vehicle of the Pune-based automaker, has executed a loan agreement with Standard Chartered Bank for €100 million (about Rs 970 crore). It's an unsecured loan for a period of one year.
Earlier on Thursday, Bajaj Auto said it has decided to take control of KTM AG by way of a 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.
On Thursday, Bajaj Auto shares closed 0.48% higher at Rs 8,733.75 apiece on the BSE even as the benchmark Sensex ended the day 0.79% lower at 80,951.99 points.
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