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Is ktm going to be able to pay out amateur racers contingency
The state is having to make good on the back pay for the workers. I wonder if they will cover the contingency?
The fines for withdrawing from MotoGP would be imposed by Dorna, MotoGP organizer, not the sponsors.
Obviously I don't know the amount but it had to be more than 1 year expenses to force Kawasaki to come back as "Hayate Racing Team" in 2009.
KTM doubles down
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I am curious how the contingency program pays the dealer. I assume you use your credits at the dealer and they get reimbursed by the OEM? Hope the dealers don’t get screwed.
As a fan/owner of the machines themselves im here for the manufacturing peeps and dealers.
If I remember correctly, we were credited on our parts account when someone used their contingency money at the shop. KTM may do it differently though.
Nobody knows anything about the race teams or contingency or any of that stuff because we don't know the finances of KTM North America. They may have the ability to keep their marketing efforts afloat for a while without the help of Austria. Or Maybe they collapse the moment their funding is cut, we don't know.
MotoGP is a totally different deal.
Does Roger have his CV on the street? That is the question
Pulp mentioned that Daniel Blair would be joining for a new weekly podcast.
Is orange brigade done?
poor Blair. No more broadcast gig which he still won't share details on. goes to KTM, loses all his riders to star and then KTM goes bankrupt.
And poor dunge. Coffee, intense and now ktm.
Roger may have to travel to the races on the transporter and share a room with 3 other dudes at a Motel 6. lol
I believe it was stated the riders are under contract when he left.
We race off road and collect some contingency here and there from GG and KTM but do not depend on it. On the other end of spectrum are those amateur families highly dependent on the program. They must be really scratching there head about now. Hope it works out for them.
Lots of head scratching going on about now.
i have certain customers that ride certain classes and certain bikes to make enough contingency money to keep racing. This is gonna hit those type of families hard.
I wonder if we'll see people buying other brands who are dependent on contingency money (not knowing the certainty of KTM's immediate and long term future).
Serious question, I was in the market for a 25 350sxf, should I wait? Is their going to be better pricing? Also would this affect dealers getting parts?
Pit Row
Problem here in Kansas is the Japanese oem's don't pay in as many classes as the KTM group.
Oh, I didn't realize it varied by state. Good to know.
I am having a hard time with the numbers. .14 return for liquidation is hard to imagine. That is only 400Mil on 2.9Bil.. How much is the inventory worth? I call BS here.
Almost certainly that is net return after all transaction costs, where the devil is in the details on liquidating inventory - whole bikes and components not yet fed into final production of a bike, tooling, etc. Institutional creditors would farm that out. There was a surge of Ohlins suspension on EBay after Canondale liquidated, banks weren't the sellers.
Then there's time value of money waiting on return in both scenarios, lawyer and other adminstration fees, management opportunity cost. It's also speculation after crunching numbers, as is the return on payments if it continues as a going concern (which to me anyway is more likely than not, and it seems the creditors lean that way as well).
Absolutely, thanks for pointing that out. I would not want folks to think I thought otherwise. Maybe I am crazy but wouldn't the factories and brand be worth a billion or so to venture capitalists or hedge fund?
Yes, yes, unknown!
That's essentially what prospects for new capital will play out - more value being perceived as a going concern than in liquidation. And a reorg may effectively do that by spinning the assets out to NewCo and sink the debts into a liquidation entity, at least that becomes an alternative in the states (although usually in a mass product liability scenario, and GM may have done that in its BK to get out from under pension liability). But I would expect EU/Austrian laws to be more constraining on that sort of shell game, so defer to those with a better sense of that than I have.
But to me anyway buying the brand it doesn't seem as easy a windfall as for example the people who bought the Hostess brand when they shut down. It's a lot easier to find someone to make twinkies with non-union labor. But Triumph now is the same play and seems to be making progress, but in the larger motorcycling world it has a deeper history behind the brand value.
Given the experience with the financial genius who ran this into the ground I'm not sure VC types are desirable or plausible. VCs tend to want big returns on risk, very high multiples. They tend to risk one big score from 10+ different prospects that will fail, which is hard to see paying off here. My cynicism is they'd be inclined to bleed it out. Kvarme, a rich finance guy who seems to have gotten in as passion/vanity project and pulled the trigger pretty quickly when he left, with a lot of people holding the bag. Money also isn't as free as it was before interest rates escalated, and easy debt is what drives a lot of this sort of overreaching.
Most seem to think KTM will have more value as a going concern, which will ding pretty much everyone in the short term apart from consumers willing to buy overstock 24s. Saw a dealer here with 24 250SX two strokes going for $6649, up to $4k off some larger bore four strokes.
Nothing is certain at this stage, lots of contingencies still to play out, unforeseen as well as a range of predictable possibilities.
My Gas Gas contingency was good at the local shop today.
I agree with this guy on this one.... Be patient. Don't chase it. It will come to you (the deals). Pressure is just starting on the KTM group to generate cash flow.
FTE Great points. I would be surprised to see KTM go away as a mfger- there is a lot of good there. No doubt bad decisions were made. Someone didn’t keep a close watch on the business pulse (sales – sell through) and just keep the throttle pinned for continued growth. Sadly this is common
I don’t think a VC will touch this thing. Certainly not a Silicon valley based or minded VC. Valley type VC’s don’t look for these type of deals imo. They want new markets that can be exploited with 1000x returns. And to your point they will make 10 bets in new markets looking for that unicorn. Maybe it’s a private equity deal? Smart money though will dig deep into the books and part of the deal will be punting the management team that drove the bus into the tree. You don’t want the same driver back in the drivers seat (did you see the Co-CEO position?). Depending on equity of Stefan Pierer … this could be a problem. Will he take a back seat? He was the top guy when the buss hit the tree. But he also took KTM from a off brand into a MXGP/ SX / AMA national winning enterprise producing bikes Japan based mfger's wouldn't make and growing the business. In other words he was paying attention to the market when others were not. How do you balance this? Who wants this project? When your money could be chasing something more interesting with a broader addressable market...... Personally - I think they will survive but it will not look the same as it does currently. I think there will be some great deals in the next 2-5-9 months on your favorite KTM models. And if Yamaha is paying attention now is the time for a e-Start YZ250X and YZ300X as well as a YZ350F and FX. The market is coming to them... just grab it!
I'm pretty sure that's what is contemplated with additional investors, can't imagine they're going to market with new shares or bonds. As long as it brings management discipline and focus restoring the core business, not the barbarians at the gate deal where it gets strip mined.
Any new updates on this deal?
Post a reply to: KTM to file for Bankruptcy/ Self Restructuring on Friday