Text: Ole-Andreas Isdahl
Photo: KTM

As expected, KTM was too big to fail

MCN reports tonight that KTM’s fight to avoid bankruptcy has paid off. The group has managed to raise a total of 548 million euros, and can now resume operations. MCN reports tonight that approximately 800 million EURO is needed to normalize operations in the company. The value of the brand, the inventory and the technology has thus been confirmed, although there is no mention of who is behind the refinancing package. It has been suggested that CF Moto and Bajaj are part of the group of investors and it is also reported that BMW is now also involved. But information about the investor group is being withheld

50 million EORO in start-up aid

In order for KTM to be able to resume production by mid-March, the company will receive 50 million euros from the new investor group. KTM expects to have all four production lines in full operation within three months with one shift a day.

Big politics and power struggles

Many believe that it would be difficult for Bajaj to own something together with Chinese CF Moto, but the picture is complicated and in this case there are many dependencies that actually tamper a lot. KTM has a close relationship with CF Moto with the production of the LC8c engines, and Bajaj is already on the ownership side. If the US, with Trump at the helm, represents a common threat to Asia, these players can probably eat many large camels together. But it’s hard to see clearly what BMW’s motives might be. They will probably eventually just answer that they see this as a financial investment since the upside after a cleanup (read MV Agusta out, Husqvarna stands on its own feet) is mega large. The inventory has a great value and savings as a result of a restructuring can certainly contribute to being able to calculate a little of everything. There is no doubt that a cleaned-up and restructured brand like KTM will have a high value.

New clouds may appear on the horizon

What happens with the ownership of Husqvarna is just as exciting. If BMW is deeply involved in this “deal”, everyone knows that BMW previously owned Husqvarna before the ownership was transferred to KTM. If BMW again enters the fray, it will once again be exciting and not least important to clarify what they now want with a new ownership of Husqvarna. Perhaps this part has already been resolved, it remains to be seen.

Brutal consequences

Approximately 600 employees have lost their jobs, production has stopped and the company is losing a lot. In addition, CEO Stefan Pierer is stepping down to make way for a new and probably heavy-handed junta that will now turn the company around. It will probably also cost blood, sweat and tears.

Fortunately, the KTM brand lives on

For all motorcycle lovers, however, this is an important and not least joyful day. Let’s hope that more people learn from KTM’s mistakes, which obviously involved a growth strategy that was a little too aggressive and a good portion of hubris. What the final price for these mistakes will be remains to be seen.