Big trouble for KTM

I've been reading about their serious financial state, but I haven't seen any confirmation "pulling out of MotoGP"; halted development, yes. Pull out, no.


From Hervé Poncharal, team principal and founder of Tech3, as reported by Mateo Anglio...
"For 2025 everything is confirmed - he anticipates our question - In Barcelona, during the last GP, I had a meeting with Hubert Trunkenpolz, Pit Beirer and Carmelo Ezpeleta: there is a plan and it will be respected. From the information I have received, the Racing Department will not be touched by the Pierer Group's financial difficulties.''

Of course, things could change in a minute.

@Tor if you have more, please share!
 
Only big trouble for the local employees here in Austria...
By declaring "bankruptcy" they (successfully?!) bailed out of all November + December wages and payments to the 300 lay-offs... (3600 workplaces affected in total)
(currently they negotiate to get the open payoffs covered by the state insolvency fee funds (tax money) and then they're on unemployment (more tax money)...)
OTOH did they cash € 11 Million on state grants (tax money!) during COVID, a stunt their CEO "celebrated" by gifting himself and the other share holders € 68 Million dividends in 2022...

IMO likely a planned strategy, they've already opened sites (hence obviously "moved production" to) in India and China... lower wages -> higher dividends...
I suspect that even the machines in Mattighofen have already been "sold" as overseas assets...
Seems that all the creditors will get are empty buildings, some worn down desks, a few posters and beach-flags...

Their (former) CEO Pierer? Ah, he's safe... no financial obligations, already joining the Rosenbauer corp...

The usual: profits are privatized, losses nationalized...
 
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Thanks for the domestic perspective from KTM's home country, @ST1100Y .

It was never my intention to diminish or minimize the seriousness of their situation and its impact to their Austrian and other employees. It's sad, perhaps criminal, that the executives reap obscene rewards while the company that delivered them fails into financial ruin. :)
 
Their "bankruptcy" could be similar to a Chapter 11 bankruptcy in the U.S. Doesn't mean they're shutting down everything immediately, but gives them time to restructure finances and operations.
 
ReSTored said:
Their "bankruptcy" could be similar to a Chapter 11 bankruptcy in the U.S. Doesn't mean they're shutting down everything immediately,
Click to expand...

Looks like it.

"""""""KTM is proposing a restructuring program which involves reducing production and cutting the number of people it employs. Plans are already in place to cut 700 staff by the end of this year.

More importantly, the proposal entails creditors writing off 70% of their loans, with the guarantee that the remaining 30% will be paid back within two years. Creditors who reject this proposal will still be owed the entire amount, but risk losing it all if KTM goes completely bankrupt.""""""
 
KTM has applied for a "self administered" restructuring that will be under the supervision of court appointed overseers. It is similar to Chapter 11 but a bit different in Europe. They are seeking to get out from under some $3+ billion (with a B) debt. The first meeting with the overseers is in the near future. They have until January to come up with a plan that will be put to the creditors/bond holders in February. If they vote to OK the plan, in all likelihood, KTM will get out from under the $3+billion in debt but the secured creditors will get about 30 cents on the dollar. The unsecured creditors (of which warranty work is one) will get nothing. Remains to be seen what happens to the some $40 million in wages owed to workers. Layoffs have already happened and production is going to cease for 2 months early next year.

Nothing is for sure yet and nothing will be until next year. The only thing for sure is that KTM is in a big debt crisis. It is not impossible that they will go under and their large Indian partner (or someone else) will take them over. KTM is saying that their Motogp, and other racing programs , going ahead unfettered but that is PR talk. The racing programs are under KTM AG and it is one of the divisions on the line.

Decent article on the situation here
www-krone-at.translate.goog

“Day X” for the future of KTM starts on February 25th

Saving, reducing inventories, reorganizing - in the course of the restructuring process, KTM not only wants to get rid of its debts in the billions, ...
www-krone-at.translate.goog www-krone-at.translate.goog
 
Certainly in the short term, if not long term, I wouldn't want to be a KTM owner requiring warranty repairs.

Dealers are not going to be doing warranty work when there is a significant risk of no reimbursement for labour and parts.
 
Moto gp is expensive and the upcoming move of Moto gp to 800cc engines will drive KTM out, not wanting to spend development monies new engines. Jmo
 
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