Bajaj Auto Ltd on Wednesday said its step-down subsidiary, KTM AG, has cleared all outstanding dues under the earlier €450 million secured term loan provided by Bajaj Auto International Holdings BV.

“KTM AG has pre-paid all the outstanding dues under the said facility agreement to BAIH BV. This has consequently marked the termination of the agreement on March 5, 2026,” the Pune-based company said in an exchange filing.

Last week, KTM AG secured a €550 million (about Rs 5,904.8 crore at an assumed exchange rate of €1 = Rs 107.36) refinancing loan from an international banking consortium to refinance its existing debt with Bajaj Auto International Holdings BV. The consortium includes DBS Bank Ltd, JP Morgan S.E., The Hongkong and Shanghai Banking Corporation Ltd, and MUFG Bank Ltd.

The refinancing loan is unsecured, carries a five-year tenure, and bears interest in the low-to-mid single-digit percentage range. During the tenure, KTM AG will also be subject to standard market restrictions on dividend distribution.

In May 2025, Bajaj Auto International Holdings BV had extended a €450 million loan to KTM AG to support the Austrian motorcycle maker’s restructuring plan.

KTM AG has been undergoing a broader strategic reset after facing liquidity stress and operational disruptions in 2024. In November 2025, Bajaj Auto completed the acquisition of a controlling stake in the company and backed it with an €800 million support package to help KTM meet court-mandated restructuring obligations and avoid insolvency.

The funding package included a €450 million secured term loan and €150 million through convertible bonds, in addition to an earlier €200 million support package. The financial assistance enabled KTM to meet a May 2025 deadline to repay 30% of outstanding claims to creditors under its court-approved restructuring plan.

As part of its restructuring and efficiency programme, KTM AG announced plans in January 2026 to cut around 500 jobs to lower costs and streamline operations. The company’s workforce stood at 3,794 as of December 31, 2025, down from 5,310 a year earlier.

Meanwhile, Bajaj Mobility AG, the parent company of KTM AG, has divested several non-core businesses. These include the sale of FELT Bicycles, the exit from the CFMOTO distribution partnership, and the divestment of stakes in MV Agusta and X-Bow, as the group sharpens its focus on core motorcycle brands – KTM, GASGAS and Husqvarna.

In FY25, KTM AG reported consolidated sales of just over €1 billion, marking a 46% year-on-year decline amid restructuring and operational challenges.