KTM to Enter Self-Administration and Restructure
KTM parent company Pierer Mobility will apply to restructure the business as it continues to deal with financial issues
KTM’s financial status is once again in the news, with owners Pierer Mobility confirming it will apply for “judicial restructuring proceedings with self-administration” or ‘Sanierungsverfahren unter Eigenverwaltung’ on 29 November.
“The financing requirements of KTM AG currently amount to a high three-digit million figure,” the statement says, adding, “The management now does not expect to be able to secure the necessary interim financing in time.”
The plan is to “agree a reorganisation plan with the creditors within 90 days,” with a view to making KTM Group a much stronger going concern. The news caused shares to drop by almost 50 per cent.
Right now, KTM simply has too many bikes. It won’t have escaped your attention that heavy discounting has become the norm on the products of KTM and associated brands, and the announcement notes that there will be a "gradual adjustment in excess stock at KTM and its dealers over the next two years.”
The news comes after it emerged KTM is to pause production in January and February next year. The executive board has also been reduced from six to two people, and there have been significant job cuts.
When we spoke to KTM global product manager Stefano Branca at EICMA earlier this month, he remained upbeat despite the current challenges. “We are, let's say, recovering from a post-Covid situation, having a higher dealer stock than expected,” he said, adding, “There's nothing that is absolutely not under our control. “You can already see what we are bringing here, how many new models we have in our line-up…we are not giving up at all.”
In a press release, KTM AG CEO Stefan Pierer said: “We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future. The KTM brand is my life's work and I will fight for it.”
Meanwhile, Gottfried Neumeister, Co-CEO of KTM AG, said: “We build our motorcycles reliably and robustly for every race, for every terrain. Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”
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Matt has a background in motoring journalism of the four-wheeled variety but has long had a passion for motorbikes, taking his first steps into riding in 2010.
