Next piece of bad news for motorcycle manufacturer KTM: a “far-reaching restructuring” requires a whopping amount of bridge financing
A slump in sales, job cuts in Austria and a sharp drop in the share price: KTM, a motorcycle brand belonging to the Pierer Mobility Group, is currently going through turbulent times. After a profit warning, the next piece of bad news for the Upper Austrian motorcycle manufacturer: a financial injection in the triple-digit millions is necessary.
A press release from the Pierer Mobility Group speaks of an “additional liquidity requirement at KTM AG”. Talks are therefore already underway with the core shareholder Pierer Bajaj AG and the financial creditors.
According to those responsible, “a far-reaching restructuring at the KTM AG level is necessary.” To this end, the Austrian manufacturer urgently needs a cash injection. “In addition to securing liquidity, the executive board is striving to put KTM AG back on a stable operational and financial footing,” the Austrians report.
“In the context of a challenging economic environment, an even more far-reaching operational restructuring is being pursued with the aim of significantly reducing production volumes in order to reduce inventories at the KTM AG and dealer level to an economically sustainable level. Furthermore, the overhead area will also be significantly adjusted again,” specify those responsible at the Pierer Mobility Group.
The aim is to stabilize costs and sales at a “redimensioned level” from the 2025 financial year onwards, thus creating the basis for sustainable competitiveness and profitability.
It is unclear whether and, if so, how the difficulties will affect the MotoGP project. It became clear to those involved as early as the summer that challenging times lay ahead and that measures would have to be taken to ensure the long-term survival of the company.
MotoGP is an important prestige project for KTM. It is therefore unlikely that they will reconsider their participation in Grand Prix racing. At the beginning of the summer break, KTM’s rising star, Pedro Acosta, visited the factory in Mattighofen and enquired about the situation. The Spaniard was assured that “investment in the MotoGP project will continue”.