Effects of the insolvency on the supply chains
Since the insolvency became known at the end of November 2024, many suppliers have stopped deliveries. Despite a promised repayment of 30 percent of the liabilities, KTM has not yet been able to regain the trust of many partners. Only stocks were sufficient to maintain production for around 4,200 motorcycles between March and April 2025. Now crucial components are missing to continue the production process.
Short-time work instead of redundancies
In order to avoid redundancies, KTM has reached a company agreement: From May 1 to July 31, 2025, around 3,000 employees will work short-time. The working week will be reduced to 30 hours and salaries will be adjusted accordingly by around 20 percent. While salaried employees will work a four-day model, skilled workers will stay at home but continue to receive the reduced salary.
Funding gap of 600 million euros
The future of KTM depends on the fulfillment of the restructuring plan, which provides for a payment of around 600 million euros (€600 million ≈ $640 million) by May 23, 2025. Without this sum, the Group is at risk of being broken up. Originally, a capital increase of 350 million euros (€ 350 million ≈ $373 million) was to be resolved. A combination of a cash capital increase and a non-cash capital increase with an issue price of €7.50 ($8) per share was planned.
Failed capital increase
Shortly before the Extraordinary General Meeting on April 25, 2025, Pierer Mobility AG unexpectedly had to announce that the planned measures could not be implemented as planned. Talks with investors are proving more difficult than hoped, so the agenda items on the capital increase were canceled. Instead, Pierer Mobility AG is now working together with the main shareholder Pierer Bajaj AG on alternative solutions.
Publication of the annual financial statements postponed
The tense situation is also having an impact on financial reporting: The publication of the 2024 annual financial report has been postponed to the end of May 2025. This is due to the going concern assumption – i.e. the assumption that the company will be able to continue as a going concern for the foreseeable future. Without binding financing commitments, accounting would only be possible at break-up values.
Hope for a new start in August
Despite all the difficulties, KTM is cautiously optimistic. If the financing gap can be closed and the missing components arrive, production on all four production lines should restart in one-shift operation from the end of July 2025. This would allow the company to try to regain lost ground and secure its continued existence.
Conclusion
The situation at KTM remains tense. The renewed production stop, the difficult search for investors and the delay in the annual financial statements show that the road out of the crisis will be longer and more difficult: The road out of the crisis will be longer and rockier than initially hoped. Whether the traditional motorcycle manufacturer can successfully complete its restructuring will be decided in the coming weeks.
[amazon bestseller=”KTM” items=”3″]
