Bajaj Auto to Gain Control of KTM
Bajaj Auto, an Indian automotive manufacturer, is set to become the majority shareholder of Austria-based KTM. KTM is currently facing financial difficulties. On Thursday, Bajaj Auto made public that it has given a loan of €800 million (about ₹7,765 crore) to KTM through its fully-owned company, Bajaj Auto International Holdings BV. Once regulatory approvals are granted, Bajaj Auto will shift from minority to majority shareholder status, gaining control rights over KTM.
Bajaj and KTM Share a Long Partnership
KTM is known for high-performance motorcycles. Bajaj has long partnered with the brand. In India, Bajaj handles both manufacturing and sales of KTM bikes. The company also plans to keep exporting motorcycles to over 80 countries using KTM’s global network.
Breakdown of the Loan Package
The loan of €800 million supports KTM's financial recovery. Bajaj Auto has already invested €200 million. The remaining €600 million was added recently. KTM will use these funds to restructure, repay creditors, and manage operations. The support helps KTM stabilize and gives Bajaj Auto additional ownership rights.
Previous Ownership Details
Before this investment, Bajaj Auto International held a 49.9% stake in Pierer Bajaj AG (PBAG), KTM’s Austrian holding. The rest was owned by Pierer Industrie AG, controlled by Stefan Pierer. Pierer Industrie also holds about 75% of Pierer Mobility AG (PMAG), KTM’s parent company. Bajaj Auto held 37.5 % of KTM directly. After the new contract, this will allow the company to control the majority of stakes.
Governance Changes Expected
After receiving necessary approvals, Bajaj Auto plans to restructure KTM’s board. Governance changes will also follow. These steps aim to align KTM’s management with Bajaj’s strategies.
KTM’s Financial Struggles
KTM and its subsidiaries had accrued large amounts of debt by November 2024. The company was so deep in losses that it had to be put through a process of restructuring. Shareholders agreed to a plan that would see KTM paying off just 30% of the debts by May 23, 2025 whereas the rest would be written off. Bajaj Auto’s loan also falls into this category of the comeback plan. If the court gives its blessing, Bajaj Auto is poised to become the new owner of KTM.
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