Authorization Granted for Pierer Mobility to Secure Funds for KTM Stock Shares
Taking a Gamble: Pierer Mobility's Plan to Fund KTM's Crisis, Hits a Snag
Last Friday, Pierer Mobility held an extraordinary general meeting to discuss the pledging of KTM shares. The objective was to gather funds needed to settle KTM's creditor obligations - but no capital increase was on the table just yet. The gathering unfolded at the "House of Brands," Munderfing, due to significant losses in the 2024 business year, causing half of the share capital to evaporate. To fulfill KTM's restructuring plan with a 30% cash quota by May 23, a hefty capital infusion of €350 million is required, but it's not happening anytime soon.
Initially, the plan included resolutions for an ordinary increase in Pierer Mobility's share capital through a cash injection of €150 million and a non-cash contribution of €200 million. However, these points were struck off the agenda as they couldn't be implemented within the given timeframe due to the proposed conditions.
With the initial strategy in tatters, shareholders approved the pledging of KTM shares, aiming to raise up to €500 million in debt capital. This move garnered a massive majority vote, with only a minority opposing or abstaining. Nevertheless, Pierer Mobility has yet to announce the identity of these debt investors.
Meanwhile, Pierer Mobility delayed the annual financial report, originally slated for the end of April. However, some financial key figures will be released next week. Clearly, the company is juggling multiple options to stay afloat.
History of Struggles
Pierer Mobility is currently grappling with a complex financial web. The company requires around €600 million in funding from equity and debt investors by May 23, 2025, to meet a 30% payout quota demanded by its restructuring plan, approved in February 2025. Pierer Mobility's debt amounts to approximately €1.8 billion, which it must pay off to satisfy creditor claims, including about 180 banks. With the initial capital increase plan failing to materialize, Pierer Mobility is still negotiating with these investors to finalize financing arrangements, faced with the grim possibility of resorting to liquidation accounting for insolvent subsidiaries like KTM AG.
In essence, Pierer Mobility's capital increase plan is currently under reconstruction, and the company is in a high-stakes game of chess against a May 23 deadline to secure the funds essential for KTM's restructuring and continued operation.
The capital increase plan initially proposed an ordinary increase in Pierer Mobility's share capital, through a cash injection of €150 million and a non-cash contribution of €200 million. However, due to the proposed conditions, these points were removed from the agenda.
In an attempt to raise funds, shareholders approved the pledging of KTM shares, aiming to secure up to €500 million in debt capital. Nevertheless, the identity of these debt investors remains undisclosed.
