Bankrupt motorcycle manufacturer KTM needs billions from investors to save its business. It has 265,000 motorcycles in stock.
The bankrupt motorcycle manufacturer KTM has a significant amount of unsold motorcycles in stock. According to bankruptcy trustee Peter Vogl, this amounts to 265,000 units, which is equivalent to the company's annual sales.
This is reported by the media outlet Der Standard .
The information came to light during a court hearing in Ried, Austria, where Vogl presented his report on KTM's financial situation.
KTM, which also owns the motorcycle brand Husqvarna, has a debt of more than 13 billion Danish kroner. For the company to survive, it requires a restructuring in which lenders and suppliers accept that they can only get 30 percent of their receivables. In addition, 5 billion kroner must be injected in new capital from investors.
One of the potential investors is Indian motorcycle manufacturer Bajaj, according to Der Standard. The court in Ried has ruled that KTM can continue operations until February, when lenders must decide on the restructuring plan.
KTM's financial problems are due, among other things, to large investments in bicycle manufacturing and the Italian motorcycle brand MV Augusta. These investments have been made while the core motorcycle business has been struggling. In addition, KTM has had to cover losses in several subsidiaries, which are also at risk of bankruptcy.
To improve its financial situation, KTM must now sell the many motorcycles from its warehouse. Possibly at huge discounts. The bankruptcy court has allowed the company to lay off 300 employees and reduce working hours to 30 hours a week.
KTM employees can look forward to receiving their salaries for Christmas, as an Austrian wage guarantee scheme has come into effect. However, it is still unclear whether KTM can be saved from bankruptcy. The company's future depends on whether it succeeds in finding investors and getting lenders to accept the restructuring plan.
