The Board of Directors at Bajaj Auto Limited has approved investing funds of up to 150 million Euros in its wholly-owned subsidiary, Bajaj Auto International Holdings BV, Netherlands. The infusion of fresh funds of approximately Rs.1,360 crore is intended to fund BAIH BV’s investment opportunities, with capital being provided in the form of equity capital, preference capital or loans, depending on future requirement.
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Bajaj Auto has not specified the exact nature of the investment opportunities, but the company, through BAIH BV, currently owns a 49.9 per cent stake in Pierer Bajaj AG (PBAG), while the remaining controlling stake is held by Pierer Industrie AG. PBAG holds nearly 75 per cent ownership in subsidiary Pierer Mobility AG, which is the parent company for KTM AG.
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The additional capital infusion is expected to help BAIH BV explore new investment avenues, possibly strengthening Bajaj Auto’s stake in KTM AG and enhancing its global footprint in the premium motorcycle segment. Sources in Bajaj Auto have disclosed that the leadership at Bajaj Auto is not keen to take over management of KTM AG, despite the fresh investment, and KTM will continue to operate as an independent Austrian brand with its own management and personnel.
Late last year, KTM had announced that it would need emergency funds to keep itself afloat, following reports of a staggering $3 billion debt that the company now finds itself in. The announcement by Bajaj doesn’t specifically mention its intention to invest in KTM, but it’s widely believed that the funds of 150 million Euros (around Rs. 1,360 crore) will be used to boost KTM’s finances in Europe, possibly even making Bajaj Auto the biggest shareholder in KTM. More details are expected in the next few weeks about the future of KTM AG, as well as Bajaj Auto’s strategic new investment in the Austrian brand.
