Bajaj Auto announced on Thursday that it will acquire a majority stake in Austrian motorcycle manufacturer KTM AG through its wholly owned subsidiary, Bajaj Auto International Holdings BV.
Key Highlights
- Bajaj Auto to acquire majority stake in KTM with ₹7,765 crore investment, enhancing global presence.
- €800 million funding supports KTM's restructuring; Bajaj transitions from minority to majority stakeholder.
The move shifts Bajaj Auto's role from minority stakeholder to majority owner, and it is expected to strengthen the company's position in the premium and sports motorcycle markets.
Funding package to stabilise KTM’s finances
According to the company, the acquisition will help with KTM's ongoing restructuring, ensure operational continuity, and expand Bajaj's global reach in the motorcycle market.
€800 million funding commitment to support debt restructuring
BAIHBV has committed to an investment of €800 million (approximately ₹7,765 crore), including:
- KTM AG received a secured term loan worth €450 million (₹4,365 crore).
- Pierer Bajaj AG (PBAG) issued convertible bonds worth €150 million (₹1,455 crore).
- €200 million (₹1,945 crore) was previously infused as shareholder debt.
Court deadlines and funding timelines
The funding is intended to help KTM's finances by supporting a court-approved debt restructuring plan and providing working capital. The company stated that €200 million of the total amount has already been infused, with the remaining €600 million being disbursed.
These financial measures are intended to meet a court-imposed deadline of May 23, 2025, by which 30 percent of creditor claims must be resolved. Failure to do so may result in insolvency proceedings for KTM and its subsidiaries.
Regulatory approval is sought for PBAG control
Bajaj Auto also intends to acquire a controlling stake in PBAG, the parent company of Pierer Mobility AG, which owns KTM AG. This requires regulatory approval in Austria. Currently, Bajaj Auto has an indirect 37.5% stake in KTM through PBAG and Pierer Mobility.
In accordance with Sebi regulations, shareholders vote via postal ballot
The Bajaj Auto board has approved seeking post-facto shareholder approval for these related-party transactions via postal ballot, in accordance with Sebi regulations.
Milestone in Bajaj's global motorcycle strategy
The acquisition is a significant step in Bajaj Auto's international strategy, and it is expected to help KTM's financial recovery and business operations. The two companies already collaborate on a joint development programme based in India.
