The Pierer Mobility group has announced that struggling bike manufacturer KTM will enter self-administration and apply for the initiation of judicial restructuring proceedings.
The Austrian marque is undergoing a significant financial crisis and was seeking at least €100 million to continue operating beyond 2024.
The company, currently competing in MotoGP, has laid off hundreds of employees and plans to pause production of its bikes in January and February of next year.
However, on Tuesday KTM owner Pierer Mobility AG announced that the company's management was expecting to be unable to secure the necessary financing in time, and so it will begin a formal restructuring process.
It has opted for restructuring with self-administration, meaning KTM's current management will remain in control of the company during the process, working under court supervision to implement a reorganisation plan.
It said it aimed to agree on the plan with creditors within 90 days.
"Redimensioning the group should not only secure the continued existence of the KTM Group in the long term, but also create the basis for emerging stronger from the proceeding," said Pierer Mobility in a statement.
"A redimensioning of production should lead to a gradual adjustment in excess stock at KTM and its dealers over the next two years. This will result in a reduction in operating performance at the Austrian sites totalling over one billion euro in the years 2025 and 2026.
"The restructuring process will result in additional potential losses, for example, due to one-off expenses such as necessary write-downs and costs for staff reductions as well as the shortfall in fixed costs due to the reduced operating performance and other costs arising from the restructuring process.
"Consequently, for the current 2024 financial year, the company expects a negative annual net result in the very high three-digit million range due to the aforementioned reasons."
