The plan was to hold an Extraordinary General Meeting on April 25, 2025, at which a capital increase totaling 350 million euros (around 375 million US dollars) was to be resolved. This was to be divided into a cash capital increase of EUR 150 million (approx. USD 161 million) and a non-cash capital increase of EUR 200 million (approx. USD 214 million). However, both measures were removed from the agenda at short notice.
Financing process continues – hope rests on investors
Pierer Mobility is under enormous time pressure. Around 600 million euros (around 643 million US dollars) must be raised by May 23, 2025 in order to service the 30 percent restructuring plan quota accepted by the KTM Group’s creditors. According to the management, it is “in the finalization phase” of negotiations with equity and debt capital providers. A failure of these talks would have serious consequences.
Without binding financing commitments, there is no basis for a positive going concern forecast – the prerequisite for accounting at going concern values. Otherwise, the company would have to prepare its annual balance sheet on the basis of break-up values, which would further exacerbate the situation.
Negative equity – Annual General Meeting necessary due to loss
Pierer Mobility had already announced at the beginning of April that equity would probably be significantly negative at the end of 2024. This is due to a massive reduction in operating performance and high restructuring costs. According to the company, the result for the 2024 financial year will be heavily negative. The loss of half of the share capital forces the company to convene an extraordinary general meeting in accordance with Austrian stock corporation law.
In this context, the auditor has made use of its statutory duty to speak. Publication of the full annual financial report has now been postponed to the end of May 2025. The company intends to present further preliminary key financial figures by then.
Capital increase at € 7.50 per share originally planned
Originally, the rescue plan envisaged two capital measures at an issue price of €7.50 (around USD 8.04) per share:
- Cash capital increase: €150 million by issuing new shares with subscription rights for existing shareholders. Shares not subscribed were to be taken over by the main shareholder Pierer Bajaj AG.
- Capital increase in kind: EUR 200 million through the contribution in kind of loans granted by Pierer Bajaj AG. The loans amounting to EUR 150 million (plus a further EUR 50 million) were previously provided to restart production.
These measures would have increased the share capital of Pierer Mobility AG by a factor of around 2.4 – a step that was, however, postponed until later.
Ownership structure and responsibility
Pierer Mobility AG is 74.9 percent owned by Pierer Bajaj AG. This in turn is majority-owned by Stefan Pierer’s Pierer Industrie GmbH; around half of the shares are held by the Indian Bajaj Group. According to the company, the funds for the loans for the planned non-cash capital increase also come from Bajaj Auto, a long-standing partner.
Outlook: Uncertain future with hurdles
While the Management Board continues to assume that the talks with investors will be successfully concluded, the economic future of the KTM Group remains uncertain. If no solution is found by the deadline, there is not only the threat of accounting at break-up values – the continuation of business operations could also be seriously jeopardized.
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