Is KTM in financial trouble?

[Yorick]

Maybe not completely made-up press stuff? Sounds like talks are actually happening, at least:

https://www.visordown.com/news/ktm-moto ... s-hamilton

I heard that a while ago. Important word is "had" talks. Not holding talks

[mangocrazy]

Given the scale of KTM's debts, I do wonder what Lewis Hamilton can do to help them out. Estimates of his net worth vary widely - Forbes reckons he's worth $57M, whilethe Sunday Times inflates it to $300M. Even if the ST is correct, the scale of KTM's losses dwarf Hamilton's net worth. How much of that reputed $300M would Lewis be prepared to risk, I wonder?

[ChrisW]

Even if the ST is correct, the scale of KTM's losses dwarf Hamilton's net worth. How much of that reputed $300M would Lewis be prepared to risk, I wonder?

We'll have to wait and see what turns out to be true or not, or indeed actually comes off.

I don''t think Lewis Hamilton would be looking to bail out the Pierer group as a whole. Getting involved in the MotoGP project is perhaps more believable.

[Sadlonelygit]

I find it strange/coincidental that KTMs problems started soon after our lord and master decided he wasn't going to ride motorcycles for a while!
Did Weeksy keep PMG afloat singlehandedly? Discuss

[The Spin Doctor]

More KTM fall-out. The Austrian metal foundry that mainly made parts for KTM was declared insolvent last month. Vöcklabrucker Metallgießerei GmbH had €35m euros of debt and was unability to pay salaries before the legal deadline of December 15. It seems that the former family-run business was founded almost 70 years ago, and was only wholly acquired by KTM Components as recently as September. Over 100 people have lost jobs at the foundry, and prospects for recovery are grim. The blame is being placed on the production stop at KTM, and an over-reliance on manufacturing for the motorcycle manufacturer. The company products included motorcycle swing arms, wheel hubs, gearbox housings, valve housings and more. VMG also supplies BMW, General Electric, Siemens or the fire engine manufacturer Rosenbauer. The insolvency administrator has already closed various parts of the company and is now looking for a buyer

And just days ago, Avocodo GmbH from Linz has also gone into restructuring proceedings, but this time without self-administration. It's affairs are being settled at the Linz Regional Court. The company, which provides extensive software services for the Pierer and KTM, was also owned 100 by Pierer and employs 126 people. Once again, the causes of the insolvency is said to be KTM's failure to pay the bills.

And finally the spin-off Pierer E-Commerce GmbH with 25 employees has also applied for insolvency proceedings with the court at Ried im Innkreis, owing €4m.

[Skub]

It's a right shitstorm.

[mangocrazy]

Yes, when a company the size of KTM goes titsup it drags loads of small suppliers down with it. KTM's habit of buying up everything in sight really hasn't helped it either.

[McNab]

They must have known they were in the shit in September, so why spunk a load of money to buy out a company that only supplies themselves?

[Horse]

They must have known they were in the shit in September, so why spunk a load of money to buy out a company that only supplies themselves?

Same costs, but they keep [any] profits?

Not saying it was anywhere near 'sensible' though!

[The Spin Doctor]

To put KTM's problems in perspective, KTM's debt was reported to the insolvency court at €2.9 billion, across more than 1600 creditors, including 180 banks. FWIW, the International Monetary Fund bailed out Bangladesh in Jan 2023, with a loan of $4.7 billion.

KTM now has a back inventory of more than 265,000 motorcycles. To put that in perspective, that's more than twice the entire number of motorcycles sold in the UK, and it's a years-worth of production.

KTM have more dealers in the US than Hardly-Ableson.

KTM's recovery plan involves offering creditors 30% of what they're owed, paid back over 2 years.

[The Spin Doctor]

They must have known they were in the shit in September, so why spunk a load of money to buy out a company that only supplies themselves?

They've known they were in difficulty since Dec 2023 when they off-loaded the electric cycle companies Felt and R Ramon for peanuts. They'd paid top dollar when they purchased them at the back-end of the COVID cycling boom in the second half of 2021.

https://www.cyclingweekly.com/news/felt ... nvironment

[mangocrazy]

Latest developments today - although the real crunch date is February 25th when we find out whether the restructuring plan has legs or not.

https://www.gpone.com/en/2025/01/27/mot ... roved.html

[Skub]

Latest developments today - although the real crunch date is February 25th when we find out whether the restructuring plan has legs or not.

https://www.gpone.com/en/2025/01/27/mot ... roved.html

Money fixing money. It's like an alien language to me.

[The Spin Doctor]

Bear in mind that the ~€900m investment only helps pay off the '30 cents in the Euro over two years' debt restructuring plan which is the legal minimum. It seems the banks that loaned Pierer cash want rather more than that, and I'm not surprised.

So this injection doesn't solve Pierer's long term issues - namely the 200,000 bikes they have sitting in warehouses.

[ChrisW]

So this injection doesn't solve Pierer's long term issues - namely the 200,000 bikes they have sitting in warehouses.

Is that more of a short to medium term issue - compounded with the lack of faith in the bikes what with recent stuff etc. and also any concerns about future warranty claims if it all does slide down the tubes?

[The Spin Doctor]

So this injection doesn't solve Pierer's long term issues - namely the 200,000 bikes they have sitting in warehouses.

Is that more of a short to medium term issue - compounded with the lack of faith in the bikes what with recent stuff etc. and also any concerns about future warranty claims if it all does slide down the tubes?

It's a year's production they are sitting on. Apparently, they have also left MV Agusta with 4500 unsold bikes they need to shift.

[ChrisW]

So this injection doesn't solve Pierer's long term issues - namely the 200,000 bikes they have sitting in warehouses.

Is that more of a short to medium term issue - compounded with the lack of faith in the bikes what with recent stuff etc. and also any concerns about future warranty claims if it all does slide down the tubes?

It's a year's production they are sitting on. Apparently, they have also left MV Agusta with 4500 unsold bikes they need to shift.

I understand that - but selling 200,000 odd outdated bikes into a market that might not actually want them isn't a long term problem.

[mangocrazy]

Bear in mind that the ~€900m investment only helps pay off the '30 cents in the Euro over two years' debt restructuring plan which is the legal minimum. It seems the banks that loaned Pierer cash want rather more than that, and I'm not surprised.

So this injection doesn't solve Pierer's long term issues - namely the 200,000 bikes they have sitting in warehouses.

I'm not surprised that the banks want more than 30% of their losses - that's quite a haircut. But what's the alternative? Do they break Pierer Mobility up into its component parts and try to find a buyer? That would be at least as risky.

The only way I'd be buying a KTM at the moment would be if I was offered a stonking discount - 40 to 50% off list. And if they have to offer discounts like that, it further compounds their woes.

[The Spin Doctor]

I understand that - but selling 200,000 odd outdated bikes into a market that might not actually want them isn't a long term problem.

Reading reports online, it's been reported on some outlets as if KTM has been 'saved'. What I'm saying is that the current cash injection gets them - IF the banks agree - past the 90 day deadline for the self-administration proceedings.

Beyond that? Who knows?

[Supermofo]

The only way I'd be buying a KTM at the moment would be if I was offered a stonking discount - 40 to 50% off list. And if they have to offer discounts like that, it further compounds their woes.

Yeah that. If I was like you and still had my 690 I'd not be worried as it's too old and there'll still be bits for a while. But no way I'd be chucking £20k at one of the new big uns not knowing if they'll collapse at any point soon.