A European restructuring procedure has been initiated in Austria regarding the assets of the Pierer Mobility Group, the parent company of KTM AG. The aim is to avert insolvency, which could lead to bankruptcy.
The first European restructuring procedure in Austria has been opened for the assets of Pierer Mobility Group AG, based in Wels in Upper Austria. This was announced on Tuesday by Kreditschutzverband (KSV) von 1870. European restructuring procedures are special procedures. The aim is to give companies that are at risk of becoming insolvent but are not yet insolvent the opportunity to recover economically in a judicial restructuring procedure before having to file for bankruptcy.
The procedure within the meaning of the Restructuring Regulation (ReO) came into effect on July 17, 2021. The further procedure is as follows: Creditors of bonds and promissory notes are requested to register their claims with the district court in Wels no later than January 31, 2025 and to send the debtor a copy of the registration of their claim.
The Pierer Group must submit a restructuring plan for KTM AG by December 27, 2024. As a restructuring officer, the Linz-based lawyer Dr. Thomas Zeitler, with his colleague Dr. Norbert Mooseder, also from Linz, as deputy.
The procedure can only be initiated if insolvency threatens or is likely in the near future. In preparation for the procedure, the entrepreneur must draw up a restructuring concept. In it he must describe in a credible manner how he wants to safeguard the survival of the company and what measures he wants to take to achieve this.
The plan requires the consent of the creditors involved by the debtor. The entrepreneur determines which creditors are involved. As a rule, he will approach those who determine the continuation or implementation of the restructuring plan. The claims of uninvolved creditors remain unaffected by the proceedings and must be paid in full. This also includes claims from employees. There is no provision that the court must inform the organizations for the protection of secured creditors. However, the debtor or a creditor can actively bring an association into the proceedings.
The European restructuring procedures are published by the courts. At the request of the debtor company, creditors must also register their outstanding claims with the court in this procedure, just as in insolvency proceedings. The European restructuring procedure meets the requirements of the EU Insolvency Regulation and is particularly recommended for companies with assets in other EU countries, as it is also recognized there.
According to KSV, KTM AG, a subsidiary of Pierer Mobility, is also facing insolvency. An application will be submitted for a reorganization procedure with self-government. According to Pierer Mobility, KTM AG’s financing requirement amounts to a high three-digit million amount. At the same time, the subsidiaries KTM Components GmbH and KTM F&E GmbH are also affected. The aim is to ensure the long-term survival of the KTM Group.
Negotiations have been going on for months with major shareholders, banks and potential investors to close the financial gap. While net debt was still 300 million euros in 2022, it has skyrocketed to 1.5 billion euros this year. On November 26, Pierer Mobility’s share price temporarily fell below 8 euros, compared to more than 60 euros a year ago.
– Thanks for information from Motorfreaks.