Bajaj Auto has obtained a substantial loan of ₹5,445 crore (EUR 566 million) through its European subsidiary to assist Austrian motorcycle manufacturer KTM AG in its ongoing financial restructuring.
The funds, sourced from financial institutions including JP Morgan Chase Co, DBS Bank Ltd, and Citigroup Inc, are intended to provide KTM with the necessary capital to meet its immediate obligations and facilitate a comprehensive reorganization.
KTM’s Financial Challenges and Restructuring Plan
KTM AG, in which Bajaj Auto holds a 49.9% stake, filed for insolvency last year due to mounting debts and operational challenges.
In February 2025, KTM reached a restructuring agreement requiring the company to repay 30% of its total debt—amounting to EUR 544 million—by May 23, 2025.
The newly secured loan is expected to enable KTM to fulfill this obligation, thereby granting the company an additional year to implement effective restructuring measures.
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Operational Setbacks and Production Halts
Despite resuming production at its Mattighofen plant in Austria earlier this year, KTM faced significant supply chain disruptions that led to a shortage of essential components. Consequently, the company was compelled to halt production again on April 28, 2025, after manufacturing approximately 4,200 motorcycles.
These operational setbacks have underscored the urgency of KTM’s financial restructuring and the importance of the newly acquired funds in stabilizing its operations.
Market Response and Strategic Implications
The announcement of the loan positively influenced Bajaj Auto’s stock performance, with shares rising by over 1% on May 19, 2025.
This uptick reflects investor confidence in Bajaj Auto’s strategic decision to support KTM during its financial difficulties.
By securing the loan, Bajaj Auto aims to protect its significant investment in KTM and ensure the long-term viability of the partnership.
Conclusion
Bajaj Auto’s acquisition of a ₹5,445 crore loan represents a critical step in aiding KTM AG’s financial recovery.
The funds are expected to enable KTM to meet its immediate debt obligations and provide the necessary breathing room to implement a comprehensive restructuring plan.
This move not only safeguards Bajaj Auto’s investment but also reinforces its commitment to the global motorcycle industry.
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