More than 3,500 employees are affected, more than 2,500 creditors and the debt mountain amounts to more than two billion euros – the bankruptcy filing of KTM AG and two companies shows how serious the financial problems of the motorcycle manufacturer from Mattighofen (Upper Austria) are. This is how the company explains the problems.
With 2.66 billion euros, Pierer Mobility AG, and thus the parent company of KTM AG, reported a turnover of 2.66 billion euros over the previous year, an increase of 9.2 percent. The result after tax showed a profit of 76.4 million euros, which was more than halved compared to 2022 – the figures published by the motorcycle manufacturer at the end of March 2024 did not indicate that the company would be ready for restructuring eight months later. , even though net debt had already increased dramatically at that point.
With the filing of insolvency applications for KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklung GmbH, the figures have been on the table since Friday afternoon: more than 3,500 employees are affected by the bankruptcy of the three companies, as well as more than 2,500 creditors and the mountain of debt amounts to more than two billion euros, and experts even estimate it at three billion euros.
In the bankruptcy filings, KTM explains the reasons for the difficulties and also how such high debts could arise. Until the end of 2023, production and sales volumes were continuously increasing, which was also due to sales to third-party dealers growing. However, they were unable to sell the hoped-for quantities of motorcycles in 2023.
About 250,000 motorcycles have been sold this year
So far this year, around 250,000 motorcycles have been sold, which KTM classifies as a good year, reports the Credit Protection Association 1870. However, the inventory appears to be too high at around 130,000 motorcycles, which requires a huge amount of capital. Weakening demand in the US would have had a particular impact here. On the other hand, the high production costs in Austria are mentioned.
In mid-November they started investigating whether an extrajudicial restructuring was possible. This would have required 650 million euros in fresh money, interim financing for KTM AG. Discussions with key stakeholders apparently could not be conducted within the short period and it was therefore decided to file for bankruptcy.
As companies directly connected to KTM, KTM Components GmbH and KTM Forschungs & Entwicklung GmbH are directly affected by the bankruptcy. That is why a restructuring procedure with their own management was also requested for them.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
