Pierer Industrie AG avoids insolvency, decision on KTM imminent

Pierer Industrie AG, which not directly owns KTM, has prevented insolvency after present process restructuring.

On Thursday, collectors voted on the European restructuring plan (ReO) of Pierer Industrie AG on the regional courtroom of Wels, in Higher Austria. This was the primary time that this process was utilized in Austria below the restructuring directive, which got here into power on 17 June 2021.

In precept, this course of permits corporations prone to insolvency however not but bancrupt to endure a court-supervised restructuring process, giving them the chance to get better financially earlier than having to declare chapter.

Pierer Industrie AG pursued this restructuring course of to totally repay financing obligations amounting to €247.5 million. The goal was to increase the compensation interval over two years as a substitute of settling the money owed instantly.

The method primarily involved the extension of maturing bonds and promissory notes. The listening to on Thursday afternoon lasted about an hour, and the proposal submitted by the corporate on 27 December 2024 was accepted. This marks the completion of its restructuring course of.

In consequence, the money owed won’t should be repaid on the initially agreed dates however as a substitute by the brand new deadlines of 31 December 2026 and 31 December 2027.

Primarily based in Wels, Pierer Industrie AG holds a 50.1% stake in Pierer Bajaj AG, which in flip owns 74.94% of KTM’s father or mother firm, Pierer Mobility AG. Moreover, Pierer Industrie AG holds an 80% stake in automotive provider Pankl AG.

KTM faces essential listening to

On 25 February 2025, the regional courtroom of Ried im Innkreis will vote on the restructuring plan for KTM AG and two of its subsidiaries. Collectors will then resolve whether or not to approve the proposed plan.

KTM has amassed money owed exceeding €2 billion from 1,170 registered collectors, together with banks and suppliers. Moreover, there are round 2,500 claims from workers.

The minimal authorized provide to collectors stands at a 30% compensation charge. In mid-February, KTM improved the provide with a money cost, which means that the proposed 30% won’t be paid over two years, as is customary, however by the tip of Could.

This cash is anticipated to be supplied by the homeowners, new traders and banks, and deposited with the insolvency administrator by mid-April. The quantity is estimated to be round €600 million. Just lately, US hedge fund Whitebox advocated for the next compensation charge.

In the meantime, efforts are below method in Mattighofen to renew manufacturing by mid-March. KTM has said that it’s engaged on securing the mandatory liquidity, with the required €150 million reportedly already dedicated by the homeowners.

The prerequisite for that is the collectors’ vote scheduled for subsequent Tuesday. If the plan is rejected, chapter and the break-up of the corporate could possibly be imminent. In that case, it’s unlikely that any funds will probably be out there to restart manufacturing.