It's been months of bad news for KTM. Insolvency. Layoffs. A year's worth of motorcycles sitting on dealership lots. Camshafts that went kablooey. A will they, won't they, will they relationship with the brand's MotoGP team. And sell-offs of both MV Agusta, only months after acquiring a controlling stake, as well as countless other small brands and the CEO and owner, Stefan Pierer, stepped down but remained co-CEO (whatever that means).
All of which is thanks to a downturn in business and some really poorly executed business decisions and the timing of a plethora of others. And that's putting it mildly, as well as skipping over what will inevitably become the next must-see Netflix documentary ala Tiger King. It does have far fewer appearances of Carole Baskin, though the same amount of her husband...
But now, after all the turmoil, the billions of dollars in accrued debt, the mounting production pauses, and back and forth between creditors, banks, would-be investors, and more, there's an outcome. No, BMW isn't saving the struggling brand, as was the rumor only a few days ago. Nor was it Remus' CEO. Someone is, and in part, that someone is Bajaj. But, Bajaj isn't the only one. Weirdly, the main party involved in saving the company wishes to remain anonymous.
I don't know about you, but that seems suspicious. Maybe it's me? Is it me? What's that? I'm being told it isn't me. I guess we speculate wildly!
According to AKV, the Austria firm helping KTM through its restructuring process, the "Restructuring plan of KTM AG accepted by the creditors," reads the press release, and adds that said restructuring will involve paying off only 30% of its creditors claims, which is to be paid to the restructuring administrator by May 25th. That's about $630 million of the nearly $3 billion in debt liabilities it was on the hook for.
Pretty good deal if you ask me.
In the restructuring plan, investors are planning on sending the group around $800 million for the brand's continuation, with $630 million going toward paying off those creditors, and the rest going toward getting the brand going again. Part of that money has already been received. Around $52 million to be exact, and that was from Bajaj, the Indian brand that already has deep ties with KTM as it produces its 390 line of motorcycles. It's set to put forth another $100 million next month.
This investment, in turn, will allow KTM to resume production next month. Though it still has a long way to go in terms of getting inventory off dealership lots. KTM, however, stated in its own release that this would start as a "phased re-start" with " The planned full capacity utilization of the four production lines in single-shift operation is to be achieved within three months." So KTM isn't just firing Mattighofen up and sending it. It'll only start with a single shift and likely only one assembly line.
However, what's interesting about AKV's reporting of the situation is that though KTM's shareholders approved the restructuring plan, they didn't disclose the other investors outside of Bajaj. In fact, AKV stated, "The name of the financing investor is still unknown." So who are the other investors? That's still unclear.
Likewise, what's set to happen to KTM as a whole? Will this restructuring plan see the now co-CEO Stefan Pierer fully lose control of KTM? Will we see further scaled-back motorcycle launch plans? Will MotoGP get a proper axe? All that has yet to be seen, as the restructuring plan outside of the debt obligations hasn't been made public. So as much as the case of the main sticking point of the case of KTM is closed, it ain't over yet, folks.
