Indian automotive giant Bajaj Auto is set to take over as the majority shareholder at KTM AG.
Bajaj agreed on an €800 million ($905,244,000) deal aimed at revitalizing KTM after a torrid 12 months that very nearly saw the company go under.
Bajaj Auto, a KTM AG stakeholder since 2007, will now become KTM’s strategic leader. Their expanded role and significant capital investment is designed to strengthen KTM’s operations and secure the company’s future.
As known for several months, KTM’s many creditors will receive 30 percent of their dues by May 30, following the company’s decision to restructure late last year.
The €800 million investment from Bajaj Auto not only reaffirms their commitment to KTM but also positions them as the controlling force behind Pierer Bajaj AG, and by extension, Pierer Mobility AG—the parent company of KTM.
“Today we have been given the opportunity to continue the history of KTM,” said KTM CEO Gottfried Neumeister in a statement. “Together with our long-standing partner Bajaj, we were able to work out a strategy that will enable us to raise a further 600 million euros for our new start in addition to the 200 million euros already made available. The existing sites—in particular our main plant in Mattighofen/Munderfing—will remain the basis for our future success. This means that we will continue to be an important employer for the entire region. In view of this new, second opportunity, we at KTM feel deep gratitude and humility towards all those within and outside our group of companies who have made it possible. I would also like to take this opportunity to thank Stefan Pierer on behalf of all those who have accompanied us along the way. He laid the foundation for one of the world’s best-known motorcycle brands, which has a unique community.”
Bajaj Auto has detailed the steps it intends to take with KTM, stating the following:
- Initiating a revamp of the governance framework including reconstituting the Board.
- Commencing the journey of turnaround – putting in place a program aimed at restoring momentum and competitive growth while driving the financial viability of the company.
- Implementing measures that widen the remit of the existing joint development program between the companies and pursuing synergistic opportunities in both the front end and back end.
- Exploring potential partnerships and collaborations to build sustainable competitive advantage and long- term value creation.
For more industry news and reviews, click here
