Bajaj Auto is taking over struggling Austrian motorcycle brand, KTM. The Indian motorcycle manufacturer and the third largest motorcycle manufacturer in the world has given KTM a total of 800-million euros (USD 905 million) in infusion transforming Bajaj from a minority stakeholder to having majority control. The move will enable KTM is bring its production facilities back online.
The news was confirmed in a stock exchange filing in India from Bajaj, in which the company stated it was transitioning to a majority owner in KTM through its wholly owned international subsidiary BAIHBV with an additional 600-million-euro infusion. This followed a 200-million-euro in funds supplied earlier this year.
The fresh cash could signal the difficulties for KTM which was on the brink of collapse for a while. Last November, KTM had to layoff its workforce in Austria and halt production there. Overproduction and quality issues were the main culprits, and they spelled major problems for parent company, Pierer Mobility AG.
The following month, bankruptcy seemed imminent as KTM entered self-administration to undergo restructuring. At the time, its massive liabilities were estimated to be more than 2.5-billion euros.
During its 90-day self-administration procedure, it ended up selling its controlling stake in premium Italian bike brand MV Agusta in February. KTM subsequently reached a deal with creditors that month to implement in a USD 576-million restructuring plan and stave off closure.
The company will first bring its latest smaller-capacity models, including 125-cc street and Enduro bikes, and 390-cc adventure bikes, to dealerships around the world.
In the Philippines, Ayala Corporation’s ACMobility let go of the distributorship of KTM. KTM as well as Husqvarna are now distributed by Lucky MAPI—a part of the Motor Ace Philippines (MAPI) group.
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