On Friday, two-wheeler and three-wheeler manufacturer Bajaj Auto said that it would be pumping Rs 1,364 crore or 150 million euros into its Netherlands subsidiary, Bajaj Auto International Holdings BV, Netherlands.
As per the regulatory filing by the auto major, the investment will be either in the form of equity capital/preference capital/loan – convertible or otherwise, as may be determined in the due course, in one or more tranches.
Bajaj Auto International Holdings BV holds a 49% stake in Austrian bike maker KTM. Pierer Mobility Group holds the remaining stake in the Austrian bike maker. On November 29, 2024, KTM announced emergency restructuring.
“KTM AG is in the process of implementing restructuring measures due to high financing needs. The management of KTM AG assumes that it will not be possible to secure the necessary interim financing in a timely manner,” Pierer Mobility Group said in a statement in November.
Notably, Pierer Mobility Group had earlier said in an investor update that it is looking for “far-reaching restructuring for KTM.”
“In addition to securing liquidity, the Executive Board is endeavouring to put KTM AG back on a stable operational and financial basis. Against the backdrop of a challenging economic environment, an even more far-reaching operational restructuring is being driven forward to reduce inventories at both KTM AG and the dealer level to an economically sustainable level by significantly reducing production volumes,” Pierer Mobility AG had said.
The restructuring process will end in February 2025.
Bajaj Auto – KTM partnership dates to 2007 when Bajaj Auto International Holdings BV (BAIHBV) picked up a 14.5% stake in KTM Power Sports AG and subsequently launched the brand in India. BAIHBV gradually increased its stake to 48%. In 2021, the shareholding was simplified when BAIHBV swapped 46.5% of its holding to gain a 49.9% stake in PTW Holding AG (the KTM group’s parent company).
At present, Bajaj Auto manufactures small-displacement KTM & Husqvarna motorcycles at its Chakan plant.
Notably, Bajaj Auto had a setback in KTM exports in the October to December quarter. “We have had a bit of a setback on KTM exports. The KTM issue globally is well known…. We’ve had to take a hit on our export volumes this time. We took a cautious approach because we didn’t want to compromise the recoverability of money that would have been due had we continued to export,” Dinesh Thapar, CFO of Bajaj Auto said during the post-earnings call.