Bajaj Auto to Participate in KTM AG Restructuring

New Delhi, May 19 (PTI) Bajaj Auto Ltd on Monday said its Netherlands-based arm is in negotiations and exploring various alternatives to participate in the restructuring of KTM AG following a plan approved by the creditors of the Austrian bikemaker.

In a regulatory filing, Bajaj Auto said, "...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."

The company further said, "Involvement by Bajaj Auto BV in the restructuring as well as arrangements in this behalf are being finalised..."

Bajaj Auto was clarifying to bourses on reports of its offshore wholly-owned subsidiary securing a loan of 566 million euros from offshore lenders, which could be for the purpose of funding the restructuring of KTM AG.

Earlier in February this year Bajaj Auto board had approved investment of up to 150 million euros (Rs 1,364 crore) in its wholly-owned arm Bajaj Auto BV to fund the needs of the latter towards investment opportunities.

The capital infusion would be made in one or more tranches depending on the fund requirements up to March 31, 2026, the company had said.

The development came at a time when Bajaj Auto has been heavily linked with the possibility of increasing its stake in the financially stressed KTM AG to bail out the Austrian bikemaker that has been undergoing a judicial restructuring.

Bajaj Auto through Bajaj Auto BV holds a 49.9 per cent stake in its associate -- Pierer Bajaj AG (PBAG) in Austria. The remaining controlling stake in PBAG is held by Pierer Industrie AG.

PBAG holds a nearly 75 per cent stake in its subsidiary, Pierer Mobility AG (PMAG), the holding company of KTM AG.

Apart from being a part equity owner, Bajaj Auto is also a strategic partner for KTM as it develops and manufactures products (under 400cc) for India and export to overseas markets.

The business in India is managed by Bajaj Auto whereas export geographies are managed mostly by KTM AG and partly by Bajaj Auto.

Last year, KTM stated that the judicial restructuring of its holding firm Pierer Mobility AG had no impact on business related to products co-developed with Bajaj Auto for Indian domestic market and select export markets. However, it impacted the business of Pierer Mobility AG/KTM AG that is run out of Austria, including exports from Austria, India and China to its key markets in the US and Europe.