Bajaj Auto to Acquire Major Stake in KTM for Rs. 7,765 Crore

Bajaj Auto is going to take control of the popular Austrian motorcycle brand KTM. The acquisition is a part of a deal that involves Rs 7,765 crore (equivalent to €800 million) of shareholder debt. KTM receives this sum from Bajaj, giving it the liquidity it needs to pay down its debt. This deal is going to take place through its Netherlands-based subsidiary, Bajaj Auto International Holdings BV (BAIHBV). For more information, read the full news. 

Funding Package to Support Debt Restructuring

According to the company, the acquisition would support KTM's continuous reorganisation and guarantee business continuity. Moreover, it will increase Bajaj's worldwide presence in the motorcycle industry. The total investment of Rs. 7,765 crore, offered by Bajaj’s subsidiary (BAIHBV), is categorised in the following way:

• Rs. 4,365 crore as a secured term loan to KTM AG
• Rs. 1,455 crore via convertible bonds in Pierer Bajaj AG (PBAG)
• Rs. 1,945 crore previously infused as shareholder debt

To pay creditors and go back to business, money will be placed in escrow accounts that are monitored by the court. The reorganisation proposal is anticipated to be confirmed by the court by mid-June 2025 after a review period.

The format of the Transaction between Bajaj and KTM

Through a series of investments, Bajaj Auto presently has an indirect 37.5% stake in Pierer Mobility AG (PMAG). It is a listed parent company that manages KTM, Husqvarna, and GASGAS. Through this proposed acquisition, Bajaj would get a majority ownership in Pierer Bajaj AG (PBAG). PBAG is the Austrian holding company that now controls 75% of PMAG.

Bajaj has assumed responsibility for an €80 million loan originally taken out by a firm in the Pierer group. This action avoided a possible loan foreclosure that may have threatened the restructuring plan as a whole. After obtaining the required permissions, Bajaj intends to:

• Reassemble KTM's board and governance framework.
• Start a thorough turnaround plan.
• Extend India and Austria's collaborative product development initiative
• Investigate new collaborations to promote long-term growth and technological leadership.

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