KTM: Lender’s team plan includes quitting MotoGP, says – Road Racing World Magazine

Financially troubled KTM plans to withdraw from Grand Prix-level road racing, according to court documents filed in connection with the company’s bankruptcy.

Alpenlandscher Kreditorenverband, the agency representing KTM’s creditors, outlined the status of the company’s restructuring efforts in a December 20 court filing.

Among the statements included are the following.

“It is planned to withdraw from MotoGP Moto3/Moto2 to reduce costs.”

KTM released a statement on the same day that it will continue with new models in 2025. The statement did not specifically mention the Grand Prix road race.

KTM expects to cut 300 jobs, below the original forecast of 500, is looking to relocate production to cut costs, and is looking for investors.

The next court hearing is scheduled for January 24.

A court statement issued by the Alpenlandscher Kreditorenverband on December 20 reads as follows:

Information on the 1st hearing of the bankruptcy proceedings of KTM AG

Today, the first creditors’ meeting and reporting session in the bankruptcy proceedings of KTM AG took place at the regional court in Ried im Increase.

Content of the reporting session

The law stipulates that the first meeting of creditors must be held within three weeks of the opening of the process in the reorganization of the self-management process. The subject of the report meeting is the bankruptcy administrator’s report on whether the conditions for immediate closure or continuation of the entire company or individual business units are met, and whether the restructuring plan is in the best interest of the bankruptcy creditors. And whether the implementation is possible.

The Alpine Creditors’ Association (AKV) insists that the restructuring administrator, lawyer Peter Vogel, recommended the process as a new restructuring process today at the first meeting of creditors, because this does not represent the current problem of creditors. In the context of general assessment.

During the reporting session, the bankruptcy administrator reported on the findings so far:
He is currently mainly in the process of assessing the financial situation, the provision of the restructuring plan and the challenges, the liability and the appropriateness of other claims, and a number of experts have already been assigned.

The bankruptcy debtor is the central company of the KTM Group. There are more than 60 branches in total.

According to the manager’s report, cooperation with the debtor and the debtor company is working well and all necessary information is provided quickly.

Self-management

The company is currently under its own management.
None of the present creditors requested the lifting of self-administration.

Continued

The company’s continuous accounting plan submitted by the bankruptcy debtor is verified and approved by experts during the bankruptcy process, and according to the current assessment, there is sufficient liquidity in the company until the time of the accounting audit. .

The Bankruptcy Court decided to continue the company in today’s session and the decision will be published in the Proclamation Register tomorrow.

Liquidity

The insolvency of all three companies (KTM AG, KTM Forschungs & Entwicklungs GmbH and KTM Components GmbH) must be confirmed by KTM AG.

Regarding the overall market situation in KTM Group’s production sector, it can be stated that although the external experts (market analysts) assume that the market is growing in general, relatively high production costs are affecting the competitiveness in Austria.

In the year In 2023, after the peak due to the Covid pandemic, the market demand has decreased.

According to the administration’s report, the number of job cuts required for the restructuring will be less than the originally planned 500 employees, possibly less than 300 at all three bankrupt companies. During the report, the restructuring manager emphasized that the salaries and wages of the workers for the month of December could be paid.

The financial plan provided by the borrower is subject to continuous monitoring and adjustment by the rehabilitation manager and experts and can be implemented now.

When bankruptcy proceedings are opened, a creditors’ committee is appointed by the bankruptcy court, of which AKV is a member.

Causes of loss

The analysis of the causes of bankruptcy by experts appointed by the court is being prepared and the basis of the decision of the creditors should be presented in good time before the voting day. This also applies to joint group transfer fees.

So far, the company has made huge investments in the last two years, which were mainly financed by loan capital, so the debt has increased significantly.

Although sales from distributors to end customers have not increased substantially since 2023, production volumes have not decreased. This led to higher inventories at the expense of liquidity.

In the year The result of the final reduction in production in 2024 was that fixed costs could no longer be covered, mainly because there were general increases in personnel, energy and materials.

Reorganization measures

The insolvency administrator has already reported on the reorganization measures initiated by the self-administered debtor.

The sale of shares in PIERER IMMOREAL GmbH is published in an edict file and offered for sale.

Payments to non-operational KTM Group sub-divisions have been halted. As a result, several subsequent losses of other KTM companies are now expected. The other two other KTM companies are essential to the continued operation of the KTM Group and are being financed by KTM AG by purchasing services and goods from them.

A withdrawal from MotoGP Moto3/Moto2 is planned to reduce costs.

To reduce production costs, the possibility of (partial) relocation of production is being investigated.

Production will be halted until the restructuring plan is approved.

Sales of hygiene at retailers.

It has already been seen that the first checks from the insolvent KTM companies will not be able to meet the quotas from their own resources or generate cash flow.

Therefore, the restructuring requires the entry of an investor and, as previously stated, KTM’s parent company Pierre Mobility has ordered Citygroup Global Markets Europe AG (“Citibank”) to obtain an investor solution. A basic agreement and agreement with the investor will be reached in mid-January. Interested parties have already approached the restructuring administrator and the debtor.

Due to the complexity of this restructuring process, it is not possible to make a serious assessment of the appropriateness and feasibility of the currently proposed 30% restructuring plan.

Creditors can still submit their claims to the bankruptcy court through AKV until January 16, 2025. In any case, it is best to file quickly as the investigation of claims takes some time.

The next hearing will be held on January 24, 2025. During this hearing, the bankruptcy trustee and the debtor will present their respective audit statements regarding the creditors’ claims.

Claims can now be filed through AKV.

AKV Europe
Alpine Creditors Association