KTM’s Struggle to Secure New Financing Could Lead to Liquidation, Lenders Warn
by Dean Adams
Wednesday, February 12, 2025
A report on Bloomberg titled "Motorcycle Maker KTM Accused of ‘Delaying Tactics’ Ahead of Vote" was published last week.
The story by author Libby Cherry details how Whitebox Advisors LLC, a US-based hedge fund holding KTM promissory notes known as Schuldschein, has accused the company of failing to engage in negotiations or respond to requests for information, according to a letter sent to management and reviewed by Bloomberg. Creditors are set to vote on the restructuring plan on February 25.
In December the Austrian press reported that KTM would exit all classes in MotoGP in after 2025.
In January, Whitebox proposed a restructuring plan offering lenders a recovery of at least 45%, compared to the 30% recovery anticipated in KTM’s own plan, as reported by Bloomberg.
KTM's epic collapse has been viewed by some as manipulation.
Under Whitebox’s proposal, all lenders would have the opportunity to provide new financing for KTM, while existing shareholders could take part in a capital increase. Whitebox also mentioned having interest from potential equity investors who could step in with capital if current shareholders don’t support the plan, according to the letter. In contrast, KTM’s plan places the responsibility on Pierer Mobility to raise up to €900 million ($930 million) in fresh funds to help stabilize the company.
Whitebox has been reaching out to other Schuldschein lenders and claims to have garnered support from a "large" number of investors, as noted in the letter.
Should negotiations fail to progress, Whitebox intends to vote against the company’s restructuring plan, the letter states. A rejection could lead KTM into liquidation or another insolvency process, where the company would lose control. Whitebox’s actions are separate from those of a group of bank lenders advised by Houlihan Lokey.
The story by author Libby Cherry details how Whitebox Advisors LLC, a US-based hedge fund holding KTM promissory notes known as Schuldschein, has accused the company of failing to engage in negotiations or respond to requests for information, according to a letter sent to management and reviewed by Bloomberg. Creditors are set to vote on the restructuring plan on February 25.
In December the Austrian press reported that KTM would exit all classes in MotoGP in after 2025.
In January, Whitebox proposed a restructuring plan offering lenders a recovery of at least 45%, compared to the 30% recovery anticipated in KTM’s own plan, as reported by Bloomberg.
KTM's epic collapse has been viewed by some as manipulation.
Under Whitebox’s proposal, all lenders would have the opportunity to provide new financing for KTM, while existing shareholders could take part in a capital increase. Whitebox also mentioned having interest from potential equity investors who could step in with capital if current shareholders don’t support the plan, according to the letter. In contrast, KTM’s plan places the responsibility on Pierer Mobility to raise up to €900 million ($930 million) in fresh funds to help stabilize the company.
Whitebox has been reaching out to other Schuldschein lenders and claims to have garnered support from a "large" number of investors, as noted in the letter.
Should negotiations fail to progress, Whitebox intends to vote against the company’s restructuring plan, the letter states. A rejection could lead KTM into liquidation or another insolvency process, where the company would lose control. Whitebox’s actions are separate from those of a group of bank lenders advised by Houlihan Lokey.
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