Bajaj secures a Rs 5,445 crore loan for KTM

Bajaj’s European subsidiary has reportedly secured a loan of EUR 566 million (Rs 5,445 crore), giving it one year's time to restructure.

UPDATE

Bajaj has subsequently shared a corporate filing to the BSE stating,"In this regard, we would like to clarify that our wholly owned subsidiary, Bajaj Auto International Holdings BV, Netherlands (“Bajaj Auto BV”), is in negotiations and exploring various alternatives to participate in the restructuring of KTM AG, pursuant to a plan approved by its creditors. Involvement by Bajaj Auto BV in the restructuring as well as arrangements in this behalf are being finalized and the Company will make necessary disclosures at the appropriate time in accordance with Regulation 30 of the Listing Regulations." 

1. Bajaj backs KTM during financial woes
2. KTM AG has agreed to restructuring deal that involves paying 30 percent of its entire debt

Bajaj secures a Rs 5,445 crore loan for KTM

KTM has a deadline of May 23 to deposit the funds

This unsecured loan has been sourced by the European unit of Bajaj Auto from financial institutions including JP Morgan Chase Co, DBS Bank Ltd and Citigroup Inc, according to a regulatory filing. However, the filing states that Bajaj Auto intends to use the funds for their investment purposes and does not state KTM.

With this loan, KTM will be able to pay back its creditors and it gains a year’s time to work on an effective restructure. KTM filed for insolvency last year and arrived at a restructuring deal in February to return 30 percent of its total debt to creditors.

KTM was given a short 3-month deadline in February to deposit EUR 544 million (30 percent of the total debt) with the insolvency administrator by May 23, 2025.

Early last month, KTM resumed production at its Mattighofen plant in Austria. However, after producing just 4,200 motorcycles,reports stated that the brand once again ceased production, effective April 28. This was due to supply chain disruptions resulting in a shortage of essential components needed to continue manufacturing.

All EUR to INR conversions based on current exchange rates.

Source: Bloomberg.com