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Article from Jalopnik today: https://jalopnik.com/ktm-is-2-3-billion-possibly-more-in-the-hole-1851749380
References this article from RideApart: https://www.rideapart.com/news/748489/ktm-insolvency-creditors-2-billion-employees-12-million-dollars/
KTM's Creditors Want $2.5 Billion, and That's Just the Tip of the Iceberg
Honestly, I don't know how we got here. Perhaps when all is said and done, we'll dive into the who, what, why, and how of the whole KTM saga, but we're still deep in it at the time of writing. New information, new releases, and new news is coming at us like a firehose, though not like those presently in Los Angeles.
And all of the news is either confusing as hell—the brand's CEO and Co-CEO switching titles for some unknown reason—or painting a further picture of doom and gloom. The latter is the topic of today, as AKV Europe, the lawyers handling KTM's self-imposed insolvency proceedings, have filed new paperwork detailing just how much the company's creditors want. And, oh boy, are they doozies of numbers.
How's $2.5 billion sound? Worse yet, in AKV's statements about the proceedings, the group states this number is likely to grow as claims are still being filed, both by creditors and employees. Ouch.
According to AKV's latest statement, "So far, there have been 3,534 claims, namely 2,347 employee registrations and 1,187 insolvency creditors." Broken down into monetary value, employees want 12,718,555.48 euros ($13,377,462.38 USD), while KTM AG's creditors want 2,172,626,058.36 euros ($2,285,168,088.18). A further $200 million, give or take, is wanted from KTM Components GmbH and KTM Research & Development GmbH.
That, dear friends, is a lot of owed cheddar.
Worse yet, AKV states, " Numerous subsequent claims are to be expected. Thus, the notifications do not yet contain termination claims of the dismissed/resigned employees and, in addition, claims are still continuously submitted to the court, which are dealt with separately in another special examination day statute. It is therefore to be expected that the registered claims will increase in the proceedings." Emphasis AKV.
The whole situation paints a dire picture of KTM's continued existence, with the statement recognizing that production of the brand's motorcycles has halted due to a massive surplus on dealership lots, despite launching multiple new motorcycles in the last few months, layoffs have continued, contract work has been halted, three executive board contracts were killed, and sell-offs of real estate are proceeding. That all said, AKV states that the insolvency group has enough liquid funds to survive until August of this year, which would allow investors to form a group to save the company.
AKV states a total of 23 potentials have come forward.
However, further pitfalls remain. "Numerous audits initiated have not yet been completed with regard to the size of the procedures," states AKV, adding, "This concerns the assessment of the adequacy of a restructuring plan, the examination of the causes of insolvency and asset forfeitment as well as possible liabilities or challenges. In addition, an estimate of movable property was commissioned." What this means is that in the process of auditing KTM's books, things might be found out that further hamper KTM's survival, as well finding new investors into the company.
They do plan on offering a restructing plan on February 25th, though finding an investor by then "remains to be seen." Both Bajaj and CFMoto are, supposedly, the lead contenders at the moment.
What occurs from here on out is anyone's guess, but based on these reports from AKV, as well as emerging news from the company itself, it's going to be a bumpy 2025 for the brand. If it survives at all...
No surprise, they've published full H1 2024 results in August, then preliminary key figures for 2024 on January 23th.
https://www.pierermobility.com/en/newsroom/eqsfeed/2924613?type=adhoc
This is what's written at the end:
Financial calendar
Due to the ongoing reorganization proceedings of the main Group company KTM AG, PIERER Mobility AG will probably publish its annual financial report 2024 in the second half of April 2025. Accordingly, the 28th Annual General Meeting and all related dates will also be postponed. As soon as the exact dates are available, they will be updated on the website https://www.pierermobility.com/en/investor-relations/financial-calendar.
The racers on that team would be wise to jump-ship if they get the opportunity
LMAO!
Beagle
No matter how many reports there are about this, you still don't seem to understand that the most favorable outcome for creditors and employees is the restructuring.
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This seems a bit misleading.
The quoted figures are the claims from the creditors, that is a normal part of the process, all creditors must come forwards with their claims, so the court can get the total amount of debt from PMG. Currently that amounts to a total debt of 2.185B (a sizable sum, might still increase but for the moment still falls short of the earlier often quoted 3B ).
Now it's up to PMG to come up with a restructuring plan to convince their creditors that they could get some part of their due (minimum 30%) if they approve the plan. Creditors and PMG are negotiating the amount offered in the restructuring plan.
Ideally of course creditors would want 100%, but written like in the article, that makes it sound (to me at least) like this is what they want from the restructuring plan or the bankruptcy while there is no way for them to get that. Or PMG would not have entered insolvency proceedings in the first place.
TLDR: 2.185B debt as reported a few days ago, nothing new here. I think they got lost in translation a bit, for instance the original article says they have enough liquidity until week 8 (end of February, next and final hearing), not until August.
"This seems a bit misleading.
The quoted figures are the claims from the creditors, that is a normal part of the process, all creditors must come forwards with their claims, so the court can get the total amount of debt from PMG. Currently that amounts to a total debt of 2.185B (a sizable sum, might still increase but for the moment still falls short of the earlier often quoted 3B ). "
Better watch this.
PMG has presented a plan to pay the minimum 30%. The Bloomberg article last Friday listed a different plan by some creditors, which would give more back to those owed. That's at least two options aside from bankruptcy. I expect more haggling before the final vote February 25th.
Correct me if I am wrong but i believe it's well withing the creditors rights to demand 100%.
Well yeah they can very well demand whatever they want... doesn't mean they could get it.
What do you think insolvency means?
The Worlds Banks are all insovlent.....yes insolvent and this will soon be well known to all of Humanity. The world operates in a debtor economy. This has to stop! Who holds the debt, well here we go again....the Evil Elohim/Archons! Who are these enities? Gobal Bankers, Corporations, Governments, The Fed, The UN, The WEF, The Who and more..... They are the PIMPs and we are the whores!
PM/KTM is an excersise in disclosure that we all get to watch because it represents our passion. Thus all this is a sideshow as there is no tangible value being negotiated. Only oppurtunity that is being exchanged from one to another. If your going down you might as well ask for the moon.
As dirt bike enthusiast we can only hope that who ever aquires PM/KTM at a potential liquidation, obtains enough of the infrastruce so they can mfg the base motorcylces and rebuild the brand.
From a quick search.....
......."Yes, based on current data, the global economy can be considered a "debtor system" as the total global debt across governments, businesses, and individuals is at a very high level, with the total debt significantly exceeding global GDP, indicating that the world as a whole is deeply in debt"......
^^^ will someone please give this guy some attention? He's been trying for 54 pages now.
I don't need the attenion, the facts need attention and that is your responsibility. As it is us (all of us) that can change the world.
He is a poster child. He drank so much Kool-aid he turned purple.
Poster child of what? What kool-aid did I drink? Please for once help me make sense of the things you say.
You think he is bullshit because you have bought into the system.
What system have I bought into? Pleeeassse say something intelligent in response, I'm begging you.
Non- moto Bro.
Well PMG I would have supported the cause today but went Kawi because you refuse to make a beginner adult (wifey) bike. Love my KTM and GG bikes but sometimes their lineup leaves me scratching my head…
Pit Row
Hahaha
is this really necessary?
Thanks for that
"The efforts of the past weeks to obtain binding commitments from potential investors have paid off. While no final agreements have been signed yet, the expressions of interest were concrete enough for the court to grant us the opportunity to continue our self-administration until the final public hearing on February 25."
Honest assessment of the situation, signals are positive but that just got them to the final stage, nothing is done until the creditors vote in 4 weeks.
I would think that even if they get courts approval some suppliers may refuse to supply them any more product or even worse yet become insolvent themselves. This could ultimately affect their production in the short term. No product - no profit. Will be interesting to see how this unfolds.
Good thing they have a huge backlog of inventory to sell
I just can’t understand how this isn’t considered criminal.
Now will ktm pay contingency for local races again?
In and out of this thread. Many of us owe on mortages, business loans, student and car loans. But the banks don't often state they want it all back NOW. So KTM has been called on it to pay everything back NOW, and supposedly can come up with 30% now, do the not have to come up with the additional 70% ever? Why were they even asked to pay all their credit back now anyways, interest on 2B seems doable for them? None of this was long term debt? Did there creditors just lose trust or is KTM actually defaulting on something specific?
They defaulted on paying their factory workers. Does that count?
Companies typically have covenants with lenders - agreements regarding meeting certain specified financial ratios (e.g. debt/equity, debt/income). If the covenants are violated, the bank has the right to call the debt. If I'm preparing a review engagement financial statement (I don't work on audits, and compilations don't generally reclassify current portion of long term debt), I will check if there are covenants, and if there are, I will run the numbers to check if the ratios are satisfied. If they aren't, all of the affected long term debt will be reclassified as current (due within a year). Now that doesn't mean the bank will actually call the debt - they almost never do if the payments are all being made on time. But they could, and if there is a default on payment, they probably will.
Post a reply to: KTM to file for Bankruptcy/ Self Restructuring on Friday