KTM-Restructuring Procedure: 2.2 Billion Euros in Claims Registered

About 1,200 creditors have asserted claims amounting to approximately 2.2 billion euros in the KTM restructuring process. In addition to this, there are over 12 million euros in claims from employees. Further claims are expected to be filed. The self-administration will continue. This was reported on Friday by various creditor protection groups after the examination session of KTM AG in Ried.

Decision on Restructuring Quota after KTM Bankruptcy in February

The decisive date will be February 25, when creditors will vote on the restructuring quota. KTM had recently offered 30 percent and wants to pay within two years. KTM will only be able to serve this quota of 30 percent or more with the help of investors, expects insolvency administrator Peter Vogl. The investor search process initiated by the company has apparently gone satisfactorily. 20 interested parties have reportedly registered. How many of them have made an offer or at what amount, he could not say. But there are several. It is certain that the Indian partner Bajaj is among them, and CF Moto from China and FountainVest from Hong Kong are also being reported in the media. In any case, more than 600 million euros need to be raised.

As for the future of KTM in motorsport, Vogl could not yet say whether there would be a long-term reduction. This will also depend on the new owners. It is certain that KTM is bound by contracts until 2026, an early exit would result in penalties. Christopher Schipper, Managing Director of KTM Austria, recently emphasized that they would be involved in MotoGP at least until 2026 and that a commitment beyond the coming year was conceivable. Whether too much money has flowed into the area, as creditor protectors suggest, Vogl did not want to evaluate. Most recently, KTM's annual expenditures for the motorsport sector were said to have amounted to 95 million euros, with 46 million of that being allocated to MotoGP alone.

140 Financial Creditors after KTM Bankruptcy

According to Vogl, 1.7 billion euros in claims involve banks and other financial creditors, totalling around 140 in number. Approximately 500 million euros are being provisionally disputed by the restructuring administrator, reported the KSV. "From a creditor's perspective, an investor's entry and the continuation of the company make economic sense. In the event of a bankruptcy court closure and breakup of the company, creditors would receive a significantly lower quota," expects Karl-Heinz Götze from KSV, and jobs would also be lost. The decisive date will be February 25, when creditors will vote on the restructuring quota.

There may be some rumblings here: "Some banks apparently want to prevent a solution at the expense of the employees of KTM AG," the "Presse" quoted from a letter by Stephan Zöchling, who was brought onto the KTM supervisory board as a KTM restructurer, to the creditor banks. He criticises therein that the banks "have enabled questionable financing in the past". "I have been informed that some banks have repeatedly emphasised during the restructuring process of KTM AG that a 30 percent quota would not be appropriate and 'at least 50 to 70 percent' must be offered in order for approval of the restructuring plan to be possible," Zöchling is further quoted. However, he points out that in the event of bankruptcy, "the actual quota would be in the single-digit range".

According to the Alpine Creditors' Association (AKV), for the time being, mainly intra-group claims are being disputed, as well as claims for damages from suppliers and the claims of creditors who have asserted rights of segregation because they assert retention of title. The restructuring administrator is still checking these claims.

Only 2,000 Employees Left After Waves of Layoffs at KTM AG

According to Creditreform, the main causes of insolvency are declining demand from end customers, high inventory, the decline in the contribution margin in 2024, factoring with long payment terms, high expenditures for research, development and motorsport, and high external capital requirements, but also loans to affiliated companies and loss financing of Pierer New Mobility GmbH and MV Agusta. However, intra-group payment flows are common according to Vogl. The entire KTM Group had around 6,000 employees at the end of 2023, currently there are 4,400 employees, of which just under 2,000 are at KTM AG, Vogl calculated. At the opening of insolvency, KTM AG still had about 2,500 employees. Currently, the factory is at a standstill after the - according to creditors' protectors largest insolvency in Upper Austria. In January and February, there was a business interruption with wage and salary cuts due to high inventory. However, Vogl has some good news for the workforce: operations are expected to resume on March 17. AMS and the state of Upper Austria have set up an insolvency foundation, which starts on February 10, offers a total of 400 places and is also open to those affected by the KTM layoffs, as regional councillor Markus Achleitner (ÖVP) announced on Friday.

(APA/Red)

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