Bajaj Moves to Take Control of Ailing KTM with €800 Million Injection

Bajaj Auto has made a move to take control of Austrian premium motorcycle brand KTM, unveiling an €800 million financial support package alongside plans to acquire a controlling stake in the parent entity. This marks a significant escalation of support from the Indian company, which has been regularly stepping in with funding support over the years, while leaving its management and strategy to its European leadership. However, despite several bailouts, KTM—once Europe’s biggest motorcycle manufacturer—has continued to totter on the edge of bankruptcy due to high operating costs and volatile demand in its core market.

Through its Netherlands-based wholly owned subsidiary, Bajaj Auto International Holdings BV (BAIHBV), the Indian automaker has outlined a dual-pronged strategy. It plans to acquire a majority stake in Pierer Bajaj AG (PBAG), the Austrian holding company that controls Pierer Mobility AG, which in turn owns KTM AG. This change in ownership structure, however, is contingent on receiving necessary regulatory approvals in Austria and Europe.

The financial lifeline comprises an already-deployed €200 million and an additional €600 million now being disbursed to help KTM AG meet critical payment obligations to creditors and restart its operations. The intervention comes at a crucial time, with KTM AG facing an impending deadline of May 23, 2025, to fulfill a court-mandated restructuring plan or face insolvency.

KTM AG and its subsidiaries—KTM Components GmbH and KTM F&E GmbH—entered a self-administered restructuring process in November 2024 due to severe liquidity stress and unsustainable debt. In February 2025, creditors accepted a reorganization plan under which KTM was required to pay 30% of their outstanding claims. Bajaj’s intervention ensures that these obligations will be met, allowing the business to exit court supervision and avoid insolvency.

“With this action and post requisite approvals, Bajaj will shift gears from being a dormant minority investor to a majority owner in the global KTM company,” Bajaj Auto said in a statement. “This twin move of taking ownership and paring down debt by providing liquidity at a crucial stage positions Bajaj Auto as a driving force in shaping the future of one of the world’s most admired high-performance motorcycle companies.”

Bajaj Auto has long been a strategic partner in KTM’s growth story. It currently owns an effective 37.5% stake in Pierer Mobility AG through its chain of investments. The KTM brand, which includes Husqvarna and GASGAS, has developed a strong presence in both off-road and on-road motorcycle segments. In India, Bajaj has been instrumental in jointly developing and producing KTM bikes at its Chakan facility, exporting them to more than 80 countries.

The current transaction reflects Bajaj’s intention to move beyond manufacturing collaboration and take strategic command of KTM’s global business. The €800 million package is structured to meet short-term obligations and fund the resumption of stalled production lines. Out of the €600 million fresh capital, €450 million is being provided as a secured term loan to KTM AG, while the remaining €150 million will be routed via convertible bonds subscribed by BAIHBV and loaned through PBAG and Pierer Mobility AG to the operating company.

The funds will be placed in escrow under the supervision of the restructuring administrator and the Austrian courts to meet creditor payouts as per the approved plan. Once the obligations are fulfilled, the court will issue legally binding orders, concluding the restructuring process by mid-June 2025.

Bajaj Auto’s commitment extends beyond financial support. The company intends to revamp KTM’s governance structure and reconstitute its board to streamline decision-making and enable faster execution of the turnaround plan. Additionally, it aims to deepen the India-Austria joint development framework and explore new front-end and back-end synergies between the two companies. Bajaj has also indicated a willingness to explore potential partnerships to bolster KTM’s market position and innovation roadmap.

Bajaj has assumed a previous €80 million debt commitment from Dabepo Holding GmbH to prevent foreclosure on pledged shares held by the Pierer Group. This acquisition of financial obligations underscores Bajaj’s strategic intent and operational urgency in securing control and continuity of KTM’s brand and operations.

KTM, known for its performance-oriented motorcycles, has faced significant obstacles in recent months due to liquidity issues. Production and deliveries were halted, and the supply chain of bikes, parts, and accessories was disrupted. The revival plan aims to restore market confidence, restart manufacturing, and resume global distribution channels.

While regulatory approvals are pending, Bajaj has started filing applications with the Austrian Takeover Commission, Foreign Investment Control, and Merger Control authorities. Until all formalities are completed, the existing control structure will remain in place.

Bajaj Auto’s acquisition of KTM can strengthen its international footprint, expanding its reach in the high-performance and premium motorcycle market. While the company has established a strong domestic brand and a solid export presence, this move can contribute to its global positioning in the segment.

As Bajaj transitions into the new role, its focus is not just on financial restructuring but also on long-term brand building, product innovation, and exploring new markets. “Following the receipt of requisite approvals, Bajaj is committed to initiating a revamp of the governance framework, restoring momentum, and driving competitive growth,” the company said.