KTM files for bankruptcy
Motorcycle manufacturer KTM AG filed on Friday in the district court in Ried im Innkreis application for declaration of bankruptcy of both the company and two subsidiaries. The information contained in the documentation shows that KTM AG has debts of EUR 1.8 billion, and the total liabilities of all three companies are estimated at approximately EUR 2.9 billion. The companies owe money to more than 2,500 creditors. The declaration of bankruptcy will also mean the need to dismiss 3,623 employees employed in all three enterprises.
KTM’s largest liabilities are towards banks, to which the company owes nearly EUR 1.8 billion. The documents submitted to the court show that these are 6 Austrian banks, as well as several international banks, including: With Germany, Hungary, the Netherlands and China.
In addition, the motorcycle manufacturer still has over EUR 356 million in debt to suppliers and subcontractors. These liabilities include, among others, promissory notes worth EUR 80 million and outstanding salaries of EUR 40 million.
Creditors are surprised
KTM’s creditors do not hide their surprise, because at the beginning of the week the company’s representatives said that the total value of liabilities oscillated around one billion euros. Meanwhile, the debts turned out to be three times greater.
Analysts estimate that KTM’s financial problems result from cost pressure and falling sales results. They admit that in times of a slowing economy, a motorcycle is becoming an even more luxurious product than before, and as a result, the demand for this type of vehicles is falling.
The Austrian company KTM was founded in 1943 and is best known for the production of competition, off-road and racing motorcycles. Since 2000, its machines have won first place in the prestigious Dakar Rally 19 times.
Tomasz Dawid Jędruchów (PAP)
