The company brought together Austria’s largest industrial bankruptcy by December 2024, so that even at the beginning of the year it was regarded as a reference throughout Europe. Austria’s most successful industrial company almost instantly accumulated a debt of 1.8 billion euros – according to other sources 3 billion euros – for which it simply has no collateral. The magnitude of the problems of the company under the influence and control of the Austrian businessman Stefan Pierer is clearly shown by the fact that, according to the Austrian Der Standard, the group owes no less than 1,600 partners. These include quite serious credit institutions, but also occasional food suppliers.
The company’s situation did not look tragic even at the end of last year. Although sales decreased by nearly 30 percent, which certainly sounds threatening, a profit of 100 million euros was still achieved with a turnover of 1.95 billion euros. In contrast, the debt of nearly 2 billion euros now stands.
The reason for the dramatic change is partially due to ill-considered acquisitions, which are almost small-ball-like and, not incidentally, in many cases financed by loans. In addition, liquidator Peter Vogl summarized at the creditors’ meeting in mid-December, although sales fell, motorcycle production was not reduced at all. As a result of reckless production, there are already more than 265,000 unsold motorcycles in stock, which is roughly the company group’s annual production. All of this coincided with the shrinking of market demand, since the traffic, as with many car manufacturers, essentially collapsed. In addition, among the problems, Vogle mentioned the need to cover the loss of affiliated enterprises, the high research and development costs and the ever-increasing borrowing needs. Although the company had partners such as the Indian Bajaj, which owns 48 percent of the company’s shares, and is one of the world’s largest motorcycle manufacturers, it was impossible to keep up with the growth ambition and pace represented by Stefan Pierer.
Heads are falling in the automotive industry, more factory closures are expected after longer forced rest periods and serious downsizing
After all this, the company applied for 90-day bankruptcy protection at the end of November 2024, which expires at the end of February. However, it seems that there is not that much time. According to Der Standard, KTM has presented restructuring plans that provide creditors with a 30 percent quota. During January, it will become clear whether it will be possible to find investors for the Upper Austrian company who will provide the capital injection urgently needed to keep the company alive. Peter Vogl believed that KTM would not be able to meet the quota from its own resources. The company has so much money that it is drawing it down by January 19.
Thus, they are now also openly talking about the fact that their participation in MotoGP – the world championship of high-speed motorcycle racing – which has been treated as a sacred cow until now, will also be abolished. So far, this has been denied at all levels, saying that such a step would cause such a loss of prestige that it would trigger processes that are difficult to reverse. At the same time, before the new year, news came to light that, according to sources close to the company, they will withdraw from Moto2 and Moto3 after 2026, in addition to MotoGP. This would mean annual savings of 77-95 million euros. Until then, the good news is that the employees were at least able to pay their December salaries on time.
Source: nepszava.hu
