Background of the Rescue Package
The uncertainty surrounding the 150 million Euro rescue package for KTM AG raises several questions that are highly relevant for private investors. Pierer Mobility AG, the parent company of KTM, has suffered significant capital losses, leading to the insolvency of KTM AG in November 2024. This has placed not only KTM but also numerous suppliers in a precarious situation.
A rescue package amounting to 350 million Euros is planned to stabilize the KTM group. The first step includes a cash capital increase of 150 million Euros, wherein new shares are to be issued at a price of 7.50 Euros per share.
Uncertainties and Risks
The markets are responding skeptically, as the value of Pierer Mobility’s shares has decreased by a third since the beginning of the year, indicating shaken investor confidence. Additionally, Bajaj Auto, an important partner of KTM, plans to invest 200 million Euros via a contribution in kind, which could increase its influence over KTM AG and lead to a shift in power.
Plan B and Alternatives
Currently, there is a lack of information regarding a Plan B in case the rescue package is not approved. A rejection would further jeopardize KTM AG. Simultaneously, the insolvency of KTM has already harmed many suppliers, and a failure of the package would exacerbate this situation.
Recommendations for Private Investors
Private investors should carefully monitor developments as the financing commitments remain unconfirmed and capital measures are on hold. A thorough risk assessment is necessary as the future of KTM and Pierer Mobility remains uncertain. The potential shift in power and the dependence on external investments are important considerations.