Bajaj Auto Plans Majority Stake In KTM To Revive Struggling Motorcycle Brand

Bajaj Auto is set to take a controlling stake in Austrian motorcycle manufacturer KTM, marking a key shift in its long-standing partnership. The Indian company, through its subsidiary Bajaj Auto International Holdings BV (BAIHBV), plans to move from being a minority investor to a majority stakeholder. This strategic decision comes at a time when KTM is undergoing a court-supervised financial restructuring to address severe liquidity challenges.

Shift from Minority to Majority Ownership

Until now, Bajaj held an indirect stake of around 37.5 per cent in KTM’s parent company, Pierer Mobility AG (PMAG), through a complex structure involving its associate company Pierer Bajaj AG (PBAG). Bajaj is now looking to acquire full control of PBAG, giving it majority ownership of PMAG/KTM. This move marks a shift from being a passive investor to taking an active role in KTM’s management and turnaround strategy.

KTM’s Financial Troubles

KTM AG and its subsidiaries entered a court-supervised restructuring process in Austria in November 2024. The company faced serious cash flow problems and could not meet its debt obligations or run daily operations. As part of the restructuring plan, KTM committed to paying 30 per cent of outstanding creditor claims by May 23, 2025. If the payment wasn’t made, KTM would have entered insolvency.

Bajaj’s €800 Million Debt Support

To help KTM meet its obligations and resume operations, BAIHBV arranged a financial support package worth €800 million. This includes:

• €200 million already provided in shareholder debt through convertible bonds/loans during FY24 and early 2025.
• €600 million fresh debt now being released:
  • €450 million as a secured loan to KTM AG.
  • €150 million as convertible bonds issued by PBAG and loaned to KTM through PMAG.

The funds are being used to pay creditors and restart KTM’s manufacturing and supply chain operations. These payments are being held in escrow as per Austrian court procedures, and a final ruling is expected by mid-June 2025.

Next Steps and Strategic Plans

Once the necessary regulatory approvals are received, Bajaj plans to implement several key steps to revive the company. This includes rebuilding KTM’s governance by reconstituting its board and restarting the production and supply of motorcycles, parts, and accessories. Bajaj also aims to strengthen the existing joint development and manufacturing operations between India and Austria. Additionally, the company will explore new partnerships to enhance KTM’s competitiveness and long-term financial stability. 

To support the ownership transition, Bajaj is invoking a special restructuring provision under the Austrian Takeover Act, which is designed to facilitate changes in control for companies undergoing financial distress

Industry Impact

Bajaj’s move highlights the growing role of Indian companies in the global premium motorcycle segment. The takeover could help KTM stabilise financially and regain market strength, especially with continued support from Bajaj’s Indian operations, which already export KTM bikes to 80 countries.

The transaction also underscores the importance of financial restructuring and cross-border cooperation in the global automotive industry. Bajaj's involvement could bring new efficiencies, help KTM regain its market position, and support long-term growth in both developed and emerging markets.