KTM’s insolvency administrator puts shares of MV Agusta on sale

An insolvency administrator has put KTM’s shares in MV Agusta up for sale, as the Austrian company continues to reel in from a financial crisis.

KTM’s parent company Pierer Mobility AG had acquired a 25.1 per cent stake in MV Agusta in November 2022, before taking over the majority of the company in March of this year.

Now, its entire 50.1% stake in the Italian motorcycle company is being sold, according to an announcement made by a regional court in Ried im Innkreis in Upper Austria on 17 December.

The administrator is also selling all shares in MV Agusta Services as part of insolvency proceedings against KTM.

Rumours suggest that former owner Timur Sardarov may be interested in buying back shares in MV Agusta in order to regain control of the company.

Like sister brand KTM, MV Agusta has also suffered from overproduction in recent months, with around 2,000 unsold motorcycles believed to be lying in warehouses in Austria. Production is set to be scaled back to match the lower demand.

MV Agusta’s declining fortunes have also affected employees in Italy. The union and management have already agreed on a solidarity pact, which includes a 20 per cent salary cut. What will happen next at its headquarters in Varese is currently unclear.

More changes at Pierer Mobility

Stefen Pierer, KTM CEO

Photo by: Gold and Goose / Motorsport Images

Meanwhile, this week, Pierer Mobility announced that Citigroup Global Markets Europe has been commissioned to reorganise its ownership structure.

In a statement, it said: “Pierer Mobility AG is currently holding talks with potential strategic investors and financial investors. On the one hand, these are existing partners, and on the other hand, talks are also being held with new strategic investors and financial investors.

“In order to carry out this process in a structured, transparent and efficient manner in the interests of all stakeholders, Citigroup Global Markets Europe AG was today commissioned to support this investment process.

“The aim of the investment process is for investors to subscribe to a necessary cash capital increase or financial instruments of Pierer Mobility AG. These cash resources are to be used to strengthen the Pierer Mobility Group, in particular KTM AG.”

Investigation launched

However, there is more trouble brewing for KTM. According to a report by the Oberosterreichische Nachrichten, which was also confirmed by the Austria Press Agency, the Financial Market Authority (FMA) in Austria has launched an investigation into its workings.

A probe is underway into whether the listed parent company Pierer Mobility has complied with disclosure regulations. This concerns the period from May to November in which the forecasts of the business were adjusted and a change in the management board was announced.

Listed companies must publish insider information immediately so that it is available to all market participants at the same time. Penalties can be imposed in case of non-compliance. The FMA has asked Pierer Mobility for a statement on this matter.

More layoffs

Brad Binder, Red Bull KTM Factory Racing

Photo by: Gold and Goose / Motorsport Images

On Thursday there was also a meeting between KTM’s bodies, the unions (PRO-GE, GPA) and the Upper Austrian Chamber of Labor. While details have been kept a secret, further layoffs are expected.

According to a report by ORF, up to 50 more people are expected to lose their jobs by the end of the year. This would mean that around 800 people had been laid off from the time the insolvency proceedings were announced.

The Upper Austrian Chamber of Labor also mentioned a further “loss of trust” in KTM after December wages were not paid before Christmas as promised.

“Due to the constantly changing economic situation and the uncertain framework conditions, the AK, trade unions and works council agreed to no longer rely on announcements, but to act only on the basis of facts,” it said.

Further, the first creditors’ meeting will take place on Friday at the regional court in Ried im Innkreis. Insolvency administrator Peter Vogel will then present a first report. The court will decide whether KTM AG and its two subsidiaries, which have also been declared self-liquidated, can continue to operate.