PIERER Mobility AG / KTM
February 26, 2025 update
KTM AG, a wholly owned subsidiary of PIERER Mobility AG, filed for court restructuring proceedings with self-administration on November 29, 2024.
The proceedings aimed to agree on a restructuring plan with the creditors within 90 days.
Restructuring plan adopted
At today’s restructuring plan meeting, the creditors accepted the restructuring plan submitted by KTM AG.
It provides for creditors to receive a cash quota of 30% of their claims.
This cash quota is to be paid by KTM AG to the restructuring administrator by May 23, 2025.
Gottfried Neumeister, CEO of PIERER Mobility AG
“I am grateful and happy today. KTM is back on track. Our employees have done everything over the last three months to ensure that the race can continue. We have closed an important chapter today. But a single chapter never tells the whole story. Now we can continue the great story of KTM. We do it for the millions of KTM fans worldwide, to whom we are grateful every day. For our racers, of whom we are damn proud. And for our Austrian location, to which we are deeply attached in our hearts. KTM remains one of the top employers in the Upper Austrian industry.”
Fresh capital of around EUR 800 million required
In order to finance the cash quota and further production, the Group requires fresh capital of around EUR 800 million.
Citigroup Global Markets Europe AG (“Citigroup”) was commissioned to support this investment process in a structured, transparent and efficient manner in the interests of all stakeholders
Production will be ramped up again from mid-March 2025
To enable production to be ramped up again gradually from mid-March 2025, KTM AG will be provided with financial resources totaling EUR 50 million from the extended circle of shareholders.
The planned full capacity utilisation of the four production lines in single-shift operation is to be achieved within three months.
Editor’s Note
This is not only big news for the brand and motorcycling in general but also for the region surrounding Mattighofen in Upper Austria.
Thousands of people outside KTM, with no direct ties to the company, who live and work in Upper Austria, will breathe a massive sigh of relief.
The ripple effects on the broader Austrian economy would have been catastrophic, especially given that the region has already been in an official recession for two consecutive years.
The Alpine Creditors Association (AKV) reports:
KTM AG’s restructuring plan accepted by creditors!
With a calculated break-up rate of 14.9%, the restructuring administrator considered the restructuring plan to be economically appropriate, as there was also no realistic alternative scenario to the restructuring plan offer.
The creditors are to receive a 30% cash quota, which must be paid to the restructuring administrator by May 23, 2025.
However, the confirmation will also be dependent on the continuation costs expected to arise up to 23 May 2025 in the amount of approximately EUR 150 million being deposited or secured.
The first tranche of this continuation guarantee, namely EUR 50 million, was already received yesterday in a trust account of the restructuring administrator.
Production is scheduled to resume in mid-March 2025.
Approximately EUR 750 million must be deposited or secured by May 23, 2025, namely EUR 600 million for the 30% quota and EUR 150 million for the continuation.
The name of the financing investor is still unknown!
Restructuring Plan Requirement
Apparently excluding individual conditional claims and individual IC claims, the requirement for the 30% restructuring plans in the proceedings of KTM AG, KTM Forschungs & Entwicklungs GmbH and KTM Components will amount to approximately EUR 600 million .
The restructuring plans will only be confirmed if they can be considered feasible. The continuation costs incurred up to May 23, 2025 will therefore also have to be deposited. In this regard, a liquidity requirement of around EUR 150 million is assumed.
Therefore, approximately EUR 750 million will have to be deposited or secured with the restructuring administrator by May 23, 2025 at the latest.
In any case , the fulfilment of this high restructuring plan requirement of approximately EUR 750 million requires considerable financial contributions from an investor .
The restructuring administrator has considered the restructuring plans to be economically appropriate , especially since a liquidation rate of 14.9% is calculated before possible claims for damages and rescission as well as possible claims for the return of deposits. The restructuring administrator assesses the probability of such claims being enforced and collected in such a way that they would not lead to a result that would be more favorable than the 30% restructuring plan rate offered. In his opinion, there is therefore no realistic alternative scenario to the restructuring plan offer.
Creditor Renumeration
The affected creditors will receive a quota of 100% of their claims, payable in two installments as follows:
– 68.69% by December 31, 2026 at the latest and a further
– 31.31% by December 31, 2027 at the latest.
Interest payments on the claims of the creditors concerned are to be made to the contractually agreed extent and at the contractually agreed due dates on the outstanding claims. The interest on the period from the last due date until the payment of the last capital instalment is paid together with the payment of the last capital instalment.
