Pierce Industry Avoids AG Insolvency, Decision on KTM

Pierce Industry AG, who indirectly owns KTM, has saved from bankruptcy after restructuring.

On Thursday, the creditors voted at the Regional Court of Regional Court in Upper Austria at the European Reorganization Scheme (REO) of Pierce Industry AG. This was the first time the process was implemented under restructuring instructions in Austria, which came into force on 17 June 2021.

In theory, this process allows companies to risk insolvency, but so far a court gives an opportunity to be bankrupt to be insolvency to go through a-revised reorganization process, which gives them an economic form before declaring bankruptcy. Get an opportunity to recover from.

Pierce Industry AG pursued this reorganization process to completely repay the funding of € 247.5 million. Objectives were to expand the repayment period in two years instead of immediate disposal of loans.

The process is mainly related to the expansion of mature bonds and promissory note. The hearing lasted for about an hour on Thursday afternoon, and the proposal submitted by the company on 27 December 2024 was accepted. This symbolizes the completion of its reorganization process.

As a result, loans will not be repaid on basically agreed dates, rather instead of the new deadline of 31 December 2026 and 31 December 2027.

Located in WELS, Pierce Industry AG has a 50.1% stake in Pierce Bajaj AG, in turn, which is the owner of 74.94% of KTM’s original company, Pierce Mobility AG. Additionally, Pierce Industry AG has an 80% stake in automotive supplier Pankal AG.

KTM faces important hearing

On 25 February 2025, Reid Im Incres’ regional court will vote on the restructuring plan of KTM AG and its two subsidiaries. The creditors will then decide whether the proposed plan be approved or not.

KTM has deposited loans of over € 2 billion from 1,170 registered creditors including banks and suppliers. Additionally, there are about 2,500 claims from employees.

The minimum legal proposal to the creditors is at 30% repayment rate. In mid -February, KTM improved the proposal with cash payment, which means that the proposed 30% will not be paid more than two years, as is customary, but by the end of May.

This is expected to be provided by the fund owners, new investors and banks, and will be deposited with the Insolvency Administrator by mid -April. The amount is estimated to be around € 600 million. Recently, the US hedge Fund Whitebox advocated a high repayment rate.

Meanwhile, efforts are underway in Matighofen to resume production by mid -March. KTM has stated that it is working on achieving the required liquidity, in which the required € 150 million is allegedly committed by the owners.

The condition for this is the vote of the creditors for the next Tuesday. If the plan is rejected, the bankruptcy and the company’s brake-up may be adjacent. In that case, it is unlikely that any money will be available to resume production.