Debt woes at motorbike maker KTM reach owner Pierer Industrie

LONDON: Austrian conglomerate Pierer Industrie AG is seeking to extend the maturity of almost €250 million (RM1.2bil) in debt as a consequence of financial strains at its KTM motorcycle unit.

The company owned by entrepreneur Stefan Pierer has initiated a restructuring process to avoid creditors demanding early repayment of debt due to the overhaul at its KTM unit, according to an emailed statement Monday.

The process is not intended to result in any reduction of creditors’ claims, it said.

Difficulties are spreading across Pierer’s conglomerate, which has been hit by a Europe-wide industrial crisis and lackluster demand for motorbikes.

The holding company, Pierer Industrie, co-owns a majority stake in Swiss-listed KTM parent Pierer Mobility with India’s Bajaj Auto Ltd.

The plans will affect a €100 million bond, as well as €132.5 million in promissory note loans and a €15 million privately placed bond.

KTM is separately trying to restructure debt that amounted to at least €875 million at the end of 2023.

"Pierer Industrie AG is not over-indebted” the company said in the statement.

"Pierer Industrie AG is in a position to fulfill its liabilities in full by taking appropriate measures.”

Bondholders for the company will be represented by a court-appointed curator based on a centuries-old Austrian law.