Bajaj Auto set to take commanding stake in KTM with €800 million lifeline
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Bajaj Auto is making a strategic leap in the global two-wheeler industry by moving to gain majority control of KTM, the renowned Austrian motorcycle manufacturer.
The initiative, led through its Netherlands-based subsidiary Bajaj Auto International Holdings BV (BAIHBV), represents a transformative step in the nearly 20-year-old partnership between the two companies.
This development follows KTM’s recent financial distress, which led the company and its key subsidiaries—KTM Components GmbH and KTM F-&E GmbH—into a court-supervised self-administration process in Austria, due to mounting operational and liquidity issues.
As part of a comprehensive revival strategy, Bajaj has extended an €800 million (around ₹7,200 crore) funding package. Of this, €200 million has already been provided in stages since FY2024 to keep KTM’s operations afloat. The remaining €600 million is now being deployed to meet creditor obligations and restart the company’s operations.
Under the deal, €450 million will be extended as a secured term loan by BAIHBV directly to KTM AG. €150 million will be provided through convertible bonds issued by Pierer Bajaj AG (PBAG), subscribed by BAIHBV. These funds will be loaned to Pierer Mobility AG (PMAG) and used to settle creditor dues and fund operational rebooting.
This rescue operation is part of a judicially approved debt restructuring plan. KTM had applied for restructuring on November 28, 2024. The plan was greenlit by creditors on February 25, 2025, including a 30% one-time cash settlement for claimants. The payment must be deposited with the court by May 23, 2025. If all proceeds as planned, the Austrian court is expected to finalize the restructuring by mid-June 2025.
Currently, Bajaj holds an indirect 37.5% stake in KTM’s parent company, PMAG, through a layered investment structure. The new deal will raise Bajaj's ownership and give it controlling interest in PBAG, which holds 75% of PMAG.
In addition, Bajaj has taken over an €80 million loan previously owed by a Pierer group firm—an important step that prevented default and helped safeguard the broader restructuring effort.
Once the acquisition clears regulatory hurdles, Bajaj plans to:
- Restructure KTM’s board and management
- Drive a full-scale revival strategy for the brand
- Strengthen joint India-Austria product development
- Explore new technology partnerships and market opportunities
The production and supply chain activities—halted amid KTM's financial troubles—are expected to resume once the funds are deployed.
With this bold intervention, Bajaj is poised to cement its place in the global high-performance motorcycle market, while reinforcing its long-term commitment to KTM.
