Indian company Bajaj Auto plans to take control of KTM AG, they have confirmed.

They have agreed an €800m (£674m) deal to breathe life into KTM, whosꦐe year has been blighted by major money issues.

Bajaj Auto have been a minor stakeholder since 2007 but will 🐓now become the strategic lead of KTM.

They will invest fresh cap♌ital enabling the motorcycle manufacturer to get back onto its feet.

KTM’s creditors will receive 30% of what they are owed by May 30. KTM filed for restruཧcturing late last year.

Bajaj Au🦂to will plough in €800m to pay creditors.

They will have a controlling stake in Pierer Bajaj AG and indirectly control of Pierer Mobility AG, who are the parent c🐈ompany of KTM.

Bajaj Auto manufact🦂urer th꧂e Pulsar motorcycle brand. They jointly create products with KTM in India.

New KTM majority owner speaks out

A statement from Bajaj Auto read: “In a significant move underscoring its commitment to its long-term partnership with KTM and recognising the opportunity in♐ the exci꧙ting world of premium/sports motorcycles given the brand’s preeminent position, Bajaj Auto Limited, through its wholly owned subsidiary Bajaj Auto International Holdings BV (BAIHBV), intends to take control of the KTM business that is headquartered in Austria, subject to necessary regulatory approvals.

“With this action and post requisite approvals coming through, Bajaj will shift gears from hitherto being a dormant minority investor to a majori🌊ty owner in the global KTM company, whilst it continues to accelerate the thriving KTM business that is run out of India under the joint development program, where it develops, makes and sells in India as well as exports to 80 countries across the KTM network.

“Simultaneously, BAIHBV has arranged a debt funding package of €800 million to enable the continuity of the KTM business by paying off the appꦿroved quota to the creditors in furtherance of KTM’s debt restructuring with the approval of the competent Court in Austria and infusing funds into the company to revive its operations and working capital cycle. Of this total €800 million debt package, €200 million has already been infused into the company so far and the balancღe €600 million is being done now.

“This twin move of taking ownership (subject to approvals) and paring down debt by providing liquidity at a crucial stage, position🐽s Bajaj Auto a꧋s a driving force in shaping the future of one of world’s most admired high performance motorcycle companies.”

What happens to KTM next?

Bajaj Auto laid out their next steps.

"The immediate next step is to secure binding restructuring orders from the Court in ⛎Aust🐟ria to mark the end of the self-administration process and settle the creditors’ quota. 

"Alongside, applications are being made to the Austrian Takeover Commission, Foreign Investment Control and Merger Control Authorities, as applicable for their approval. Till such time these are received, theℱ current control setup shall standstill and prevail. 

"Finally, after months of stoppage, the production o💖f bikes and the supply of parts, garments and accessories to the markets 🐈will be started. 

"Following the receipt 🐬of requisite approvals, 𒆙Bajaj is committed to: 

1. Initiating a revamp of the governance fr𒁏amework including reconsti൲tuting the Board.

2. Commencing the j🍒ourney ꦺof turnaround – putting in place a program aimed at restoring momentum and competitive growth while driving the financial viability of the company.

3. Implementing measures that widen the remit of the existing joint development program between the companies and pursuing synergis🐎tic opportunities in both the front end and back end.

4. Exploring potential partnerships and collaborations to build sustainable competitive advantage a✨nd long- term value creation.&nbs❀p;

"In effect therefore, the larger role of Bajaj in the f🍸uture of the KTM business offers potential to unlock a triad of opportunity covering global growth, brand elevation, and technology leadership."