it is with a million-dollar debt that KTM declared itself in bankruptcy along with two subsidiaries, which puts the work of 3 thousand peoplemore than 500 in the immediate future; this is what will happen with the Austrian motorcycle manufacturer.
KTM AG pertenece a Pierer Mobility AG and he is the oldest motorcycle manufacturer and team from Europe, however, low demand would take them into the red along with two subsidiaries.
Due to his financial situation along with KTM’s debtshis future in events is uncertain, such as in the World Motorcycle Championship or MotoGPalthough at the moment and due to their contract, they are expected to continue untill 2026.
KTM files for bankruptcy; Their debts amount to millions of euros and at least 500 people will lose their jobs
Through a statement issued on November 25, 2024, Pierer Industrie reported that KTM AG filed for bankruptcyso it keeps talks with creditors for restructuring necessary.
According to the Austrian television station ORF, the KTM’s total debt amounts to 2.9 billion euros and covers its subsidiaries KTM Components y KTM F&E, putting 3,623 workers in danger.
According to the bankruptcy filing filed before the Regional Court of Ried im innkreis, Austria, KTM must pay at least 1.8 billion euros to 2,500 creditors, which are mostly national and international banks.
This procedure that you go through KTM is in compliance with the austrian Restructuring Ordinance, in order to safeguard the stability of the group in the face of debts they maintain with creditors that coudl make promissory notes and bonds effective.
As they explain, KTM contracted loans for 132 million 500 thousand euros in the form of promissory notes; Likewise, in 2020, a bond was issued for 100 million euros, which was admitted by the Official Market of the Vienna Stock Exchange.
As a result of the KTM bankruptcy filing and its restructuring process before the Alpine Creditors Association, the Pierer Mobility shares on the Vienna stock Exchange they collapsed.
KTM Japan reported for his part that the customerswhether current or new, will not be affected by the bankruptcy filing and they commit to continue working and delivering orders for the next 90 days.
KTM and its participation in events after declaring bankruptcy
According to portals dedicated to motorcycling,due to the KTM debts and bankruptcy filingAlong with the more than 3 thousand jobs,their participation in various events is also in danger in the future.
As explained by KTM executiveHubert Trunkenpolz, la company has a contract with MotoGP which ends until 2026, so if it were dispensed with, it would aggravate the economic situation that the manufacturer is going through.
Though, the future of KTM in MotoGP beyond said year, it is indeed uncertaineven though it was also announced that at least for the remainder of this season and until February, the evolution of prototypes will be stopped.
KTM files for bankruptcy; this will happen to your future (KTM Japan via X)
What are the potential impacts of KTM’s bankruptcy on the motorcycle market in Europe?
Interview for Time.news between Editor and Motorcycle Industry Expert
Editor (E): good afternoon, and thank you for joining us today. With recent news about KTM declaring bankruptcy,the motorcycle community is understandably anxious.Can you start by summarizing the situation?
expert (X): Absolutely, and thank you for having me. KTM AG recently declared bankruptcy due to an overwhelming debt of approximately 2.9 billion euros, which extends across its subsidiaries, KTM components and KTM F&E. This declaration puts the jobs of around 3,623 workers at risk, and the implications are notable given that KTM is one of Europe’s oldest motorcycle manufacturers.
E: It’s staggering to think about the scale of this. How did KTM reach such a colossal level of debt?
X: The issues stem from a combination of factors, including declining demand in the motorcycle market and possibly mismanagement or overextension in investments. The COVID-19 pandemic also influenced many industries, including motorcycles, leading to decreased sales.It’s a tough market right now,with many manufacturers competing for a limited customer base.
E: What about the future? How will this bankruptcy affect KTM’s operations and their presence in events like MotoGP?
X: As per the information we’ve gathered, despite the bankruptcy filing, KTM is still bound by contracts to participate in MotoGP until 2026. however, the uncertainty around their financial stability casts doubt on their ability to compete effectively in such high-stakes environments. the restructuring process they’re engaging in with creditors will be critical. If they don’t secure the necessary support to stabilize, we could see significant changes in their operations.
E: Speaking of restructuring,what steps can they take to possibly turn the situation around?
X: KTM will need to prioritize interaction and negotiation with its creditors. They might explore options such as selling off non-core business units, reducing operational costs, or even seeking new investments. Additionally, reinvigorating their product line to attract more customers and focusing on innovative technology could help them regain market traction.
E: With such dramatic changes, what dose this mean for the employees? Are ther protections in place for workers affected by bankruptcies like KTM’s?
X: Unfortunately, in cases of bankruptcy, layoffs are common. With KTM being in such a precarious position, at least 500 jobs may be at immediate risk. However, the specifics can vary based on the contry’s labor laws and the terms set during the restructuring discussions. In Austria, there are protective measures in place, such as severance packages and the possibility for workers to apply for unemployment benefits. But it’s always a tough transition for employees.
E: It does sound like a challenging time for many. What does this mean for the motorcycle industry as a whole? Are we seeing a trend of financial instability among other manufacturers as well?
X: KTM’s situation highlights a broader issue in the motorcycle industry, where rising costs, fluctuating demand, and fierce competition lead to financial strain. While KTM’s bankruptcy is particularly newsworthy, it might very well be a signal for other manufacturers to reevaluate their strategies and operational efficiency. They may need to adapt quickly to changing market conditions or risk facing similar challenges.
E: Thank you for shedding light on this tough situation.Do you have any final thoughts for the motorcycle enthusiasts or industry stakeholders out there?
X: I would encourage everyone to stay informed and supportive of the industry during these turbulent times. Change can often lead to new opportunities, and we may see innovations emerge from companies needing to pivot and adapt.It’s crucial for both consumers and industry players to support brands and initiatives that promote sustainability and market growth.
E: Thank you for your insights today. The motorcycle community will undoubtedly be watching KTM’s developments closely in the upcoming months.
X: Thank you for having me. It’s a pleasure to discuss these critically important topics.
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E: That concludes our interview. Stay tuned for more updates on this evolving situation in the motorcycle world.
1 comment
The bankruptcy of KTM and the loss of jobs for so many people is truly unfortunate. Financial struggles like these highlight the importance of having tools to address unsustainable debt, not only for businesses but also for individuals. In Spain, for example, there’s the Second Chance Law, which allows individuals to cancel debt and start fresh when financial burdens become overwhelming. Legal mechanisms like this can provide a lifeline in difficult times and help people rebuild their lives. Thank you for sharing this important story.