KTM creditors file claims of €2.2 billion in court hearing

Creditors filed claims totalling around €2.2 billion against KTM AG and its two subsidiaries during the companies' insolvency proceedings in Austria on Friday.

Insolvency administrator Peter Vogl presented his third report during the hearing and he must now provide a statement on all registered claims.

At the moment, there are 3,534 claims filed against KTM AG. These are divided into 2,347 claims filed by employees and 1,187 claims filed by other creditors.

In total, the claims amount to €2.18 billion, out of which €1.66 billion has been recognised so far. 

Further, KTM Components GmbH has received 739 claims totalling almost €81 million, out of which claims worth €48.8 million have been recognised.

At KTM Forschungs und Entwicklungs GmbH, there are 1,162 applications amounting to nearly €112 million, of which claims worth €41.4 million were accepted. The Alpine Creditors Association (AKV) listed these figures in its report.

The majority of the debts accumulated at various banks. According to the insolvency administrator's report, around €1.7 billion is owed to financial creditors.

Due to the creditors’ pressure, there was also a personnel change at the top of the company, with Stefan Pierer stepping down as CEO and being replaced by Gottfried Neumeister. Pierer, however, remains on board as co-CEO.

23 potential investors

Pedro Acosta, Red Bull KTM Factory Racing

Photo by: Gold and Goose / Motorsport Images

As previously reported, Citigroup Global Markets AG was commissioned by the company to find new investors to inject money into the business. On Friday, it was revealed that 23 potential investors were taking part in this process. Some of these are strategic investors while others are financial investors.

"From a creditor's point of view, an investor's entry and the continuation of the company make economic sense,” said Karl-Heinz Goetze, the head of the Credit Protection Association of 1870.

"If the company were to be closed and broken up by the insolvency court, creditors would receive a significantly lower rate. If the company were to close, significantly more jobs would be lost, which would subsequently have massive negative effects on the entire region."

KTM is aiming for a restructuring rate of 30 per cent, which is to be paid within two years. In Friday’s audit meeting, potential investors sent positive signals regarding the proposed rate.

Production scheduled to restart amid reduction in staff

Amid rising inventory, the production lines at KTM’s Mattighofen headquarters were stopped in mid-December. The current plan is to gradually resume production from 17 March.

The entire KTM Group had around 6,000 employees at the end of 2023, but that figure has since dropped to 4,400. 

At the start of the insolvency proceedings, KTM AG employed 2,500 people. Currently, around 2,000 employment contracts are still in place and no further redundancies are planned.

The decisive date in the insolvency proceedings of KTM AG and its two subsidiaries is 25 February. Then the creditors with their registered and recognised claims will negotiate the proposed restructuring plan with a quota of 30 per cent.

The financial contribution of potential investors should make it possible to meet this legally prescribed quota. This means that creditors will receive at least 30 per cent of their registered claims, but potentially more.