Source: LIVEMINT
In a landmark move for India’s automotive sector, Bajaj Auto on Thursday announced plans to acquire majority control of Austrian premium motorcycle manufacturer KTM AG. The strategic shift comes through its wholly owned subsidiary, Bajaj Auto International Holdings BV (BAIHBV), as part of a comprehensive €800 million funding plan to stabilise KTM’s finances and support its ongoing restructuring.
The deal marks a significant transformation in Bajaj Auto’s global two-wheeler strategy, as it transitions from a minority shareholder to majority stakeholder in KTM. The Pune-based company has long partnered with KTM, but this move will give it deeper operational and financial control, bolstering its position in the high-performance and sports motorcycle segment globally.
According to Bajaj Auto’s stock exchange filing dated May 22, 2025, the Board approved the proposal on May 21. The funding initiative is designed to provide immediate liquidity to KTM and meet a court-imposed deadline in Austria related to the company’s debt restructuring plan.
As part of the rescue package, BAIHBV has executed a facility agreement to extend a secured loan of €450 million (approx. ₹4,365 crore) to KTM AG. This will be held in escrow until approved by the competent court in Austria. Additionally, Bajaj’s subsidiary has subscribed to €150 million ( ₹1,455 crore) worth of convertible bonds issued by Pierer Bajaj AG (PBAG), a KTM group entity.
These new commitments are in addition to the €200 million ( ₹1,945 crore) already infused by Bajaj as shareholder debt, bringing the total financial backing to €800 million (roughly ₹7,765 crore).
The funding is aimed at meeting a critical May 23, 2025 deadline set by Austrian courts. Under a court-approved restructuring plan, KTM must settle 30 percent of creditor claims by that date. Failure to do so could result in insolvency proceedings and removal from self-administration.
Bajaj Auto’s financial backing is essential to avert this scenario, ensuring KTM’s operational continuity and shielding its global reputation as a premium motorcycle brand.
In addition to aiding KTM directly, Bajaj Auto is seeking regulatory approval in Austria to acquire a controlling interest in PBAG—the parent firm of Pierer Mobility AG, which in turn owns KTM AG. As of now, Bajaj Auto indirectly holds a 37.5 percent stake in KTM through its interest in PBAG and Pierer Mobility.
With this acquisition, Bajaj aims to consolidate control over one of the most well-known motorcycle brands in the world, thereby elevating its own status as a global player in premium two-wheelers.
In compliance with SEBI’s related-party transaction regulations, Bajaj Auto’s board has approved seeking post-facto shareholder approval through a postal ballot. These transactions are considered material, and shareholder consent is a necessary part of the regulatory process.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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