KTM to restart production after securing creditor approval for €750m restructuring plan

KTM’s fight for survival has taken a major step forward after creditors approved a €750 million restructuring plan, allowing the Austrian brand to restart production at their Mattighofen headquarters and begin repaying debts.

The brand have been in a whirlwind of financial turmoil for some time and announced entry into a 90-day ‘self-administration’ period on November 29, 2024 – leading to a halt in production at their Austrian factory, along with multiple job losses.

Problems at the firm related to disappointing sales post-Covid, resulting in KTM being lumbered with a huge stockpile of unsold bikes – roughly 265,000 machines, many of which do not meet Euro5+ and are therefore ineligible for sale in Europe, , unless pre-registered by dealers before the January 1, 2025, cut-off, or sold through derogation.

The financial crisis was split across three insolvencies, amounting to approximately €2.5 billion in claims. KTM AG (who built the firm’s bikes) was responsible for the lion’s share of this, with 3847 claims against them equating to around €2.25 billion.

KTM FE GmbH (who are responsible for R&D) and KTM Components GmbH (who make parts), made up the remainder of the debt.

The news that production can restart came on Tuesday, February 25, with KTM now required to repay €600m to creditors (the individuals, companies, or institutions they owe money to) by May 23, 2025. This figure covers 30% of the total debts, with the remaining €150m needed to keep the operation up and running.

While the announcement means the ‘Ready to Race’ group will soon be able to begin churning out bikes again, it does not guarantee their future survival. 

“I am grateful and happy today. KTM is back on track,” Gottfried Neumeister, CEO of both KTM AG and parent company Pierer Mobility, told reporters. “We have closed an important chapter today. But a single chapter never tells the whole story.

“Now we can continue the great story of KTM. We do it for the millions of KTM fans worldwide, to whom we are grateful every day.”

Neumeister took over in charge of both companies in late January after Stefan Pierer, who had controlled KTM since 1992, announced that he would be stepping back to become a member of the board.

“For our racers, of whom we are damn proud,” the new CEO continued. “And for our Austrian location, to which we are deeply attached in our hearts. KTM remains one of the top employers in the Upper Austrian industry.”

To kickstart production, KTM have further secured a €50 million financial injection from an ‘extended circle of shareholders’.

The parties within this group currently remain undisclosed. However, Chinese firm CFMoto, Indian manufacturer Bajaj and Hong Kong company FountainVest are likely to be among them, with unconfirmed reports also suggesting BMW may be involved. 

These rumours, while unproved for now, would support the Bavarian moving into the sphere of MotoGP, an interest previously hinted at by Motorrad CEO, Markus Flasch. 

A number of bikes launched across the late 2024 show season are yet to arrive with dealers, including multiple variations of the 1390 Super Adventure, and the 990RCR sportsbike but that now should start to change with production lines coming back to life.

Huge debt write-off

Under the terms of the deal, KTM will pay creditors 30% of what they’re owed in a one-off payment – meaning 70% of their creditor debt has been written-off.

Had the creditor vote opposed the company’s plan, KTM likely would have ended up in liquidation proceedings. 

To make this happen, the company must deposit the full €600m with its restructuring administrator by a May deadline. Official judicial confirmation of the restructuring plan will only take place after the money has been paid.

To satisfy creditors and cover costs going forward, the group need to secure at least €750m, consisting of €600m to cover the 30% payment and a further €150m to sustain operations.

According to Austria-based Alpine Creditors Association (AKV), this was a better option for creditors because if the three KTM subsidiaries were shut down and sold off, they would likely get back less than 15% of what they’re owed.

Plan in place

AKV have now confirmed that the first €50m of the additional €150m has been approved, but KTM still need to raise at least €700m to meet commitments. This will require substantial external investment.

To achieve this, Pierer Mobility have called in Citigroup Global Markets Europe AG to help attract €800 million in investment. It’s unknown at this time who this will be, however a late January release from Pierer confirmed that offers had been received from several parties – with rumours suggesting BMW could be interested.

Production restarts

With the latest funding secured, manufacturing is expected to restart in mid-March after production at KTM’s Mattighofen factory was suspended in December. Operations are expected to ramp up gradually, with KTM aiming to bring their four production lines back to full capacity within three months.

Although creditor approval is a crucial milestone, KTM’s salvation is not yet guaranteed. Austrian courts are expected to confirm the full plan in early June, but this will only happen once the necessary funds have been deposited.

If KTM successfully secures the capital required, the company will move out of self-administration, marking the end of the court-controlled restructuring process. This would restore a measure of financial stability, allowing the brand to focus on rebuilding its operations, stabilising its workforce, and regaining customer trust. 

If the funds are not secured the May 23 deadline, however, the restructuring plan could collapse, forcing KTM AG and its subsidiaries into liquidation. 

If KTM build it, will customers come?

With KTM’s production pause now over, the firm’s missing 2025 models could finally emerge on the market. No time frame has been announced as to when they may appear in UK showrooms though, and there are still a number of last year’s machines available with huge money slashed off.  

In light of the brand’s financial and reputational situation – which also took a hit in 2024 when accusations of excessive camshaft wear emerged surrounding their LC8c engine platform, some KTM owners have told MCN that significant changes are still needed. 

KTM 390 Adventure owner, Chris Paterson, said: “I would consider purchasing again in the future, but only if the leadership team changed.  

“I would need to see how they perform over the next six-12 months to see if they can improve their financial circumstances. Until then, the new Suzuki dual sport looks rather nice.” 

Gareth Mayfield added: “I’ve bought five new dirt bikes and two Super Duke GTs from them. I did 50,000 mainly trouble-free miles on them. They are amazing bikes. Will I buy another new bike? No, they are too expensive and too complicated.” 

In a survey of 154 MCN readers, 71% of respondents said they wouldn’t feel comfortable placing a deposit on a new KTM at this current time.

Others were more optimistic about the brand’s future, however, including British Rally Raid legend Lyndon Poskitt, who took to social media to say:  “I’ve spent 20 years and over a million kilometres on KTM group bikes. I’ve raced, travelled and enjoyed them all over the world. I’m pleased to read they have an opportunity to navigate through this difficult time.” 

To improve the brand’s image, a new ‘Orange Blood’ online community hub is set to be launched, while KTM are also promising ‘deeper transparency with the customer base’ going forwards.