Last Thursday, KTM had to inform employees that there was no liquidity to transfer the promised advances on December salaries. On Tuesday evening, the motorcycle manufacturer made it clear: fresh capital is needed to set a course for the future. The search for investors is ongoing and a professional partner is guiding the discussions.
On Tuesday, shortly before 9:45 p.m., Pierer Mobility AG, to which KTM belongs, announced that discussions were currently underway with possible strategic investors and financial investors to raise fresh money for the bankrupt motorcycle manufacturer. On the one hand, these are existing partners with whom we speak, but on the other hand, we also get to know new strategic and financial investors. To ensure that the search for investors and money is structured, Citigroup Global Markets Europe AG was commissioned to support the process.
Billions of dollars in debt
A first sign of life from KTM after the insolvency proceedings for KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklung GmbH were opened on November 29. According to the restructuring applications, the debts of the three companies amount to almost two billion euros; experts even estimate this at around three billion euros.
250 employees have already been laid off
The bankruptcy of Europe’s largest motorcycle manufacturer was a shock for its more than 3,600 employees, but also for suppliers, politicians and the people of Austria. A few days later, the company from Mattighofen (Upper Austria) announced the first 250 layoffs, with another 500 likely to follow in January – all measures necessary to complete the restructuring, they say.
Because the warehouses are full, production is at a standstill. Production took place for the last time on Friday, December 13. Now we’re taking an early Christmas break and a complete shutdown of motorcycle assembly has been ordered for January and February. No wonder: there would be around 130,000 motorcycles in stock, KTM itself announced this during the renovation requests.
November’s salaries and most of the Christmas bonus only in January
The situation means pure uncertainty and is stressful. The employees are waiting for their November paychecks as well as the bulk of the Christmas bonus, both of which are covered by the bankruptcy compensation fund. The transfers will not take place here until the end of January. KTM had promised employees that it would transfer advances on December salaries and wages before Christmas.
There was no liquidity for advances on December salaries
Last Thursday, staff were told that there was a lack of liquidity and that advances could not be paid. A blow to the employees, which at the same time fueled the rumor mill as doubts about possible problems with the continuation of business operations became increasingly louder. On Tuesday evening, Pierer Mobility AG announced that the search for investors was in full swing.
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.
