Restructuring necessary – KTM cuts production and needs millions

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Pierer Mobility AG has recently achieved one record year after another. Now the engine manufacturer seems to be in crisis mode. It was announced that the heart of the Mattighofen company, KTM AG, needs a financial injection before 2025. There is talk of a three-digit million amount. Production is also being scaled back.

The board is currently working to secure financing for KTM AG, specifically bridge financing worth a triple-digit million dollar amount – Pierer Mobility AG announced this late Tuesday evening.

KTM AG has been responsible for more than 95% of sales to date
This means: At least EUR 100 million must be allocated in the 2025 financial year to the company that was previously responsible for more than 95 percent of the group’s turnover. A huge chunk that shows how much pressure the motorcycle manufacturer has been under.

Who should secure the financing? Discussions are ongoing with core shareholder Pierer Bajaj AG and with existing financial creditors, the company said. Negotiations and considerations on what next steps should be taken are apparently at an early stage.

Production is being scaled back
The fact is: KTM AG not only needs a huge financial injection to secure liquidity, but also needs to be put back on a stable operational and financial footing. To ensure that stocks continue to decline, production is now also being put on the brakes.

Savings are set up for administration
What the reduction in production means for the employees working there is not further discussed. One thing is already clear: the savings fund is recorded in the administration. “The overhead area will again be significantly adjusted,” says Pierer Mobility’s press release, which speaks of a “deep restructuring”.

The board was downsized, jobs were cut
Pierer Mobility AG only caused a stir on October 21 when turnover and profit expectations for this year had to be lowered and the board of directors was also reduced to two people (Stefan Pierer, Gottfried Neumeister). To this end, it was announced at the end of August that another 200 employees would have to leave.

In October the desire to consolidate and not cause further unrest among the workforce was discussed. This will be difficult to achieve given the restructuring and liquidity requirements…

Source: Krone

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