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Bajaj Auto will achieve the Majority Control of KTM AG through its full -fledged subsidiary Bajaj Auto International Holdings BV.
Bajaj Auto has announced to buy the Austrian motorcycle maker KTM on Thursday (May 22). The deal between the two companies can be for Rs 7,765 crore. Bajaj Auto will achieve the Majority Control of KTM AG through its full -fledged subsidiary Bajaj Auto International Holdings BV.
Bajaj Auto will now become a majority stakeholder from Minority Stakeholder in KTM, which is struggling with insolvency. This is expected to strengthen the company’s position in the premium and sports motorcycle segment. Currently, Bajaj Auto International Holdings holds a 49.9% stake in the KTM. Bajaj Auto is the co-owner of Auto, KTM.
What will Bajaj Auto do for KTM
Bajaj Auto said that the acquisition will help in the restructuring running in the KTM, will be operational sustainable insurance and will help to expand Bajaj’s global reach in the motorcycle market. There is a commitment of funding of Rs 7,781 crore to support debt restructuring. BaihbV is committed to invest about ₹ 7,765 crore.
What is involved in investing in Baihbv’s KTM –
- KTM AG will be given ₹ 4,365 crore as a secured term loan.
- ₹ 1,455 crore through convertible bonds in Pierler Bajaj AG.
- ₹ 1,945 crore has already been added as a shareholder date.
Bajaj Auto International Holdings holds a 49.9% stake in KTM.
Court deadline and funding timeline
The purpose of this funding is to stabilize the finances of KTM by supporting the approval date restructuring program through the court and providing working capital. The company said that out of the total amount, Rs 1,945 crore has already been invested in KTM and the remaining Rs 5,835 crore will be distributed soon.
These Financial Majors are designed to complete the time limit of 23 May 2025 set by the court. Under which the claims of 30% creditors will be disposed of. If you do not do so, insolvency proceedings can be taken against KTM and its subsidiaries.
Regulatory approval sought for PBAG control
Bajaj Auto has also planned to get a controlling stake in PBAG, a parent company owned by KTM AG. It is subject to regulatory approval in Austria. Currently, Bajaj Auto has an indirect 37.5% stake in KTM through PBAG and Pieror Mobility.
Pierler is a joint venture of Bajaj AG, Bajaj Auto International Holdings BV and Pieror Industry AG. It has a 74.9% stake in the Pearler Mobility AG, which has motorcycle brands such as KTM, Gasgas, Huskavarna and CFMOT in China. Pierler Mobility applied for bankruptcy on 29 November 2024.
Bajaj will take the approval of shareholder through postal ballot
According to SEBI rules, the Bajaj Auto Board has approved the approval of the shareholder for these related-party transactions via postal ballot.
Bajaj’s Global Motorcycle A Milestone in Strategy
The acquisition is a large milestone in Bajaj Auto’s International Strategy. This is expected to help KTM’s financial recovery and business operations. Both companies are already cooperating under a joint development program based in India.
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