Pierer Industrie AG, the parent company of KTM, took the first hurdle in the rescue plan that was launched last year to prevent KTM from going bankrupt. On February 20, creditors voted on the European restructuring plan, but February 25 is D-Day, it will become clear whether the creditors agree with the proposed plan.
On Thursday, the creditors voted on the European Restructuring Plan (REO) of Pierer Industrie AG at the Regional Court of Wels, in Opper-Astijk. It was the first time that this procedure was applied in Austria in the context of the Restructuring Directive, which came into force on 17 June 2021.
In principle, companies that are in danger of becoming Insolvent can become insolvent yet, thanks to this procedure, a restructuring undergone under the supervision of the court, giving them the opportunity to recover financially before they have to apply for bankruptcy.
Pierer Industrie AG has followed this restructuring process to fully repay financing obligations in the order of € 247.5 million. The aim was to extend the repayment period by two years instead of repaying the debts immediately.
The process mainly concerned the extension of expiring bonds and promesses. The hearing on Thursday afternoon lasted approximately one hour and the proposal that the company had submitted on December 27, 2024 was accepted. This completes the restructuring process.
As a result, the debts do not have to be repaid on the originally agreed data, but instead on the new deadlines of 31 December 2026 and 31 December 2027.
However, the most important hurdle has yet to be taken. On February 25, 2025, the Ried Im Innkreis regional court will vote on the restructuring plan for KTM AG and two of its subsidiaries. The creditors will then decide whether they approve the proposed plan.
KTM has built up more than € 2 billion in debts at 1,170 registered creditors, including banks and suppliers. In addition, there are around 2,500 claims from employees.
The minimum legal offer to the creditors is a refund of 30%. In mid -February, KTM improved the offer with a cash payment, which means that the proposed 30% will not be paid in two years, as is usual, but at the end of May.
This money is expected to be provided by the owners, new investors and banks, and be deposited with the curator in mid -April. The amount is estimated at around € 600 million. The American Hedge Fund Whitebox recently argued for a higher reimbursement percentage.
In the meantime, work is being done in Mattighofen to resume production in mid -March. KTM has stated that it is working on obtaining the required liquidity, whereby the required € 150 million is said to have already been promised by the owners.
However, the condition for this is that the vote of the creditors planned for next Tuesday is positive. If the plan is rejected, a bankruptcy and the disintegration of the company can be future. In that case it is unlikely that money will be available to restart production.
– Thanks for information from Motorfreaks.