Creditor Accuses KTM of Delaying Restructuring Process
A creditor involved in the KTM restructuring process has accused the company of using delayed tactics
KTM has been criticised by one of the creditors involved in its restructuring process for failing to respond to information requests concerning its financial troubles.
Involved in the KTM saga are several creditors, including Whitebox Advisors LLC, which is the creditor that has accused KTM of delaying the process, according to Bloomberg. KTM’s financial problems that reached debts up to €2.8 billion, have been aided in recent weeks by the involvement of subsidiary companies CFMoto and Bajaj Auto, however, it is far from out of the muddy waters it finds itself in.
Bloomberg claims KTM has failed to correspond to a letter from Whitebox Advisors LLC and that the American creditor claimed KTM was purposely avoiding contact in response to a hedge fund plan that was introduced last year.
It also goes on to say this; “In January, Whitebox proposed a restructuring plan that would offer at least 45 per cent recovery for lenders, in comparison to the 30 per cent envisaged by the company."
The proposal from Whitebox would also allow all of the brand’s lenders to new financing plans, with all shareholders able to be offered the opportunity to benefit from capital increase which would allow KTM a lifeline of sorts.
However, it’s being reported that KTM only wants to raise the new funding by itself which would leave out companies like Whitebox. The hedge fund also said that it has support from a number of KTM's creditors for the plan and that it wouldn't vote for any restructuring plan in the coming weeks put forth by KTM.
More will be known when KTM presents its own restructuring plan on 25 February which will see a vote take place, but it appears that KTM is far from out of the water when it comes to its financial struggles.
In recent months KTM’s troubles have led to self-administration, cutting its executive board members from six down to two, making hundreds of employees redundant, scrapping racing programs and selling MV Agusta shares back to its previous owner.
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After graduating with a sports journalism degree, Robert joined Crash.net to lead the WorldSBK coverage in 2021, while also providing MotoGP coverage. Fulfilling that role for over three years, Robert was able to put his knowledge about all things racing to the test.
