KTM embarks on restructuring process to emerge from crisis

KTM is currently in the midst of a crisis. In recent months, the brand had already taken some steps to get its head above water. The brand had thus made numerous layoffs and drastically reduced the size of its board of directors. However, the continued decline in sales had led its management to reduce its production costs even further.

A package of actions was not enough. To avoid insolvency, KTM, wholly owned by Pierer Mobility AG, needs a significant amount of money to meet its obligations to its creditors. A sum that "rises to three figures when talking about millions", and that the management of KTM "does not expect now to be able to get in time."

On Tuesday, November 26, the group announced that it was opening major judicial restructuring procedures. These will aim, among other things, to allow KTM to continue to manage its assets under supervision, while reorganizing with its creditors over a period of 90 days. The goal is to ensure KTM's long-term survival, by creating a solid foundation to emerge stronger from the procedure.

Please note that these procedures will only impact the group's parent company, KTM AG, and two other subsidiaries. The others, and in particular all sales companies, will not be affected. KTM's racing programs, such as the MotoGP, are not currently under threat either.

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"The pit stop for the future" from KTM

With the brand having strong ties to Red Bull, one might think that the energy drink is about to save another Austrian giant. However, this rumor was already denied by the group earlier this week. "In response to today's newspaper reports, Pierer Mobility clarifies that there are no discussions about Mark Mateschitz joining Pierer Mobility and KTM."

Despite the crisis, Stefan Pierer, CEO of KTM, reaffirmed his determination to get the brand out of this situation. The opportunity to reiterate the trust he has in his closest partner. Since September 2024, Gottfried Neumeister has become co-CEO of the company.

“Over the last three decades we have become the largest motorcycle manufacturer in Europe, he reminds in a press release published this Tuesday. We inspire millions of bikers worldwide with our products. Now we are making a pit stop for the future. The KTM brand is my life's work. I fight for it.

Gottfried Neumeister brought impressive experience. But also a lot of fresh air, He continues. He has made a significant contribution to addressing the current situation. I am confident that together with me he will lead the company on the path to success."

The restructuring process will lead to additional losses for KTM. Costs related to the reduction of personnel, or even the process itself. The company therefore expects "to a negative annual net result" for the year 2024. A deficit which will be in "the very wide range of three-digit millions."