The motorcycle giant said it had financing requirements currently amounting to “a high three-digit million” sum.
KTM is reportedly billions in debt, will temporarily cease production, and is facing further layoffs.
KTM addressed its 5000 employees on Wednesday to announce the restructuring where CEO Stefan Pierer said the business was facing “major challenges” financially.
“The proceedings give the opportunity to continue to manage the assets under supervision and to reorganize the KTM Group independently. All other subsidiaries of KTM AG, in particular all sales companies, are not affected,” a Pierer Mobility statement read in part.
“The aim of the proceedings is to agree a reorganization plan with the creditors within 90 days. Redimensioning the group should not only secure the continued existence of the KTM Group in the long term, but also create the basis for emerging stronger from the proceeding.
“A redimensioning of production should lead to a gradual adjustment in excess stock at KTM and its dealers over the next two years. This will result in a reduction in operating performance at the Austrian sites totalling over EUR 1 billion in the years 2025 and 2026.
“The restructuring process will result in additional potential losses, for example due to one-off expenses such as necessary write-downs (e.g. for capitalized development costs) and costs for staff reductions as well as the shortfall in fixed costs due to the reduced operating performance and other costs arising from the restructuring process.
“Consequently, for the current 2024 financial year, the company expects a negative annual net result in the very high three-digit million range due to the aforementioned reasons.”
The self-administration process is different from voluntary administration in so much that an external administrator will not be appointed.
KTM said it hoped to conclude the process within 90 days.
“Over the past three decades, we have grown to become Europe’s largest motorcycle manufacturer,” said KTM CEO Stefan Pierer.
“We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future. The KTM brand is my life’s work, and I will fight for it.”
Co-CEO Gottfried Neumeister added: “The enthusiasm of our employees is our most important competitive advantage.
“Their passion is the reason why KTM is globally synonymous with peak performance. We build our motorcycles reliably and robustly for every race, for every terrain.
“Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”
The Pierer Group statement noted that the subsidiaries of KTM would be unaffected by the administration process.
Subsidiaries of KTM include the factory racing MotoGP team and high-profile brands Husqvarna and GasGas.
The short-term future of the KTM factory MotoGP team is reportedly unaffected.
