Updated. KTM Files For Self-Managed Crisis Plans In Face of Possible BK
by Dean F. Adams & Associates
Tuesday, November 26, 2024
KTM is more humbled by the day—now the Austrian motorcycle manufacturer and MotoGP racing team have filed, basically, for self-managed bankruptcy as they try to make a new deal with their bankers and debt owners. If they are unable to do so then the next step is presumably full unadultered bankruptcy.
"Judicial Restructuring and Self-Administration" is the term for what KTM has now filed with securities authorities. This means that their initial plea for someone to lend them $100 million and let the same people who got KTM into this situation try to get them out. That wasn't successful and now they have taken the next step of basically trying to officially re-organize on their own without being under the thumb of a bankruptcy judge.
Their filing means that any long term contracts—like those signed with Dorna, or their riders—are now up for re-negotiation. The company is in survival mode.
KTM has slashed prices on bikes sitting on dealer floors. A dealer we know is sitting on 122 KTM machines in inventory, with 52 being non current models (2024 or earlier). He has eight identical 2024 1290 Super Adventure models with an MSRP of $21k collecting dust. And another two Superduke 1290 GT units at $20k plus sitting in the showroom since April. For the record it's almost December.
KTM's trusted media partners have published a series of "nothing to see here, move along people" stories about the company and its MotoGP future.
Let's be frank: as it stands, the company doesn't have the funds to see itself through 2025 as a motorcycle manufacturer. Let alone go racing.
Austria – 26 November, 2024 – KTM CEO Stefan Pierer and Co-CEO Gottfried Neumeister today addressed the company's more than 5,000 employees, unveiling a comprehensive plan to navigate the current financial challenges and ensure a robust future for KTM.
Making KTM robust for the future
Stefan Pierer, CEO of KTM AG: “Over the past three decades, we have grown to become Europe's largest motorcycle manufacturer. We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future. The KTM brand is my life's work, and I will fight for it.”
KTM, which has grown from 160 employees and a production volume of 6,000 units in 1992 to a capacity of up to 1,000 motorcycles per day, is now facing significant hurdles. To address these, KTM will initiate a legal restructuring proceeding with self-administration. The application will be submitted on Friday, 29 November, with the goal of concluding the process within 90 days.
Since September 2024, Gottfried Neumeister has joined the Executive Board as Co-CEO. Stefan Pierer: “Gottfried Neumeister has brought impressive experience and a breath of fresh air and has made a significant contribution to addressing the current situation. I am convinced that together we will get the company back on track for success.”
Gottfried Neumeister, Co-CEO of KTM AG: “The enthusiasm of our employees is our most important competitive advantage. Their passion is the reason why KTM is globally synonymous with peak performance. We build our motorcycles reliably and robustly for every race, for every terrain. Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”
Pierer and Neumeister emphasized the importance of the employees' commitment and support during this period. "Together, we have made KTM a success story, and together, we will carry KTM into the future," they stated.
"Judicial Restructuring and Self-Administration" is the term for what KTM has now filed with securities authorities. This means that their initial plea for someone to lend them $100 million and let the same people who got KTM into this situation try to get them out. That wasn't successful and now they have taken the next step of basically trying to officially re-organize on their own without being under the thumb of a bankruptcy judge.
Their filing means that any long term contracts—like those signed with Dorna, or their riders—are now up for re-negotiation. The company is in survival mode.
KTM has slashed prices on bikes sitting on dealer floors. A dealer we know is sitting on 122 KTM machines in inventory, with 52 being non current models (2024 or earlier). He has eight identical 2024 1290 Super Adventure models with an MSRP of $21k collecting dust. And another two Superduke 1290 GT units at $20k plus sitting in the showroom since April. For the record it's almost December.
KTM's trusted media partners have published a series of "nothing to see here, move along people" stories about the company and its MotoGP future.
Let's be frank: as it stands, the company doesn't have the funds to see itself through 2025 as a motorcycle manufacturer. Let alone go racing.
Press release from the previously very, um, proud KTM:
KTM ANNOUNCES STRATEGIC RESTRUCTURING PLANAustria – 26 November, 2024 – KTM CEO Stefan Pierer and Co-CEO Gottfried Neumeister today addressed the company's more than 5,000 employees, unveiling a comprehensive plan to navigate the current financial challenges and ensure a robust future for KTM.
Making KTM robust for the future
Stefan Pierer, CEO of KTM AG: “Over the past three decades, we have grown to become Europe's largest motorcycle manufacturer. We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future. The KTM brand is my life's work, and I will fight for it.”
KTM, which has grown from 160 employees and a production volume of 6,000 units in 1992 to a capacity of up to 1,000 motorcycles per day, is now facing significant hurdles. To address these, KTM will initiate a legal restructuring proceeding with self-administration. The application will be submitted on Friday, 29 November, with the goal of concluding the process within 90 days.
Since September 2024, Gottfried Neumeister has joined the Executive Board as Co-CEO. Stefan Pierer: “Gottfried Neumeister has brought impressive experience and a breath of fresh air and has made a significant contribution to addressing the current situation. I am convinced that together we will get the company back on track for success.”
Gottfried Neumeister, Co-CEO of KTM AG: “The enthusiasm of our employees is our most important competitive advantage. Their passion is the reason why KTM is globally synonymous with peak performance. We build our motorcycles reliably and robustly for every race, for every terrain. Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”
Pierer and Neumeister emphasized the importance of the employees' commitment and support during this period. "Together, we have made KTM a success story, and together, we will carry KTM into the future," they stated.
— ends —
