The Austrian company KTM, which has been producing motorcycles of various classes for more than 90 years (including such brands as Husqvarna and Gasgas), found itself in a critical financial situation. In 2007, the company reached a new level by presenting the X-Bow series of supercars, and recently acquired a controlling stake in the Italian motorcycle manufacturer MV Agusta. This made KTM the largest motorcycle company in Europe, but at the same time involved it in significant debt, informs the press service of the company.
KTM recently filed for self-governance for up to 90 days, which would allow it to temporarily suspend loan payments and engage in restructuring. The company officially declared itself insolvent because it could not raise the necessary interim financing. She needs several hundred million euros to settle her debt obligations. Thanks to anti-crisis management, KTM plans to buy time for negotiations with creditors on the restructuring of loans.
Restructuring involves radical measures: reducing employees, reducing the scale of production and probably closing some plants. This will not only reduce the company’s costs, but also help dealers get rid of excess inventory that has accumulated due to reduced demand.
KTM management believes that the current situation is the result of several negative factors that have worsened in recent years. Among them are economic stagnation in Europe, a recession in Germany and a drop in sales in the US caused by rising credit rates, which significantly reduced purchasing power.
