Bajaj Auto Secures €566 Million Loan To Aid KTM's Financial Restructuring

Bajaj Auto Ltd has secured a €566 million (approximately ₹5,431 crore) loan, potentially aimed at supporting KTM AG's financial restructuring efforts ahead of a critical insolvency deadline. The funding has been obtained through a consortium of major international banks – JP Morgan Chase & Co., DBS Bank Ltd., and Citigroup Inc. – as disclosed in a regulatory filing with the Bombay Stock Exchange (BSE).

Also Read: KTM Pauses Production In Austria

The timing of this strongly suggests that the funds may be directed toward fulfilling KTM AG’s obligations under a court-approved restructuring plan, which requires a payment of €544 million (around Rs 5,189 crore) to creditors by May 23. In an official statement, Bajaj Auto clarified that its Netherlands-based subsidiary, Bajaj Auto International Holdings BV, is currently in discussions and evaluating various strategies to take part in KTM's restructuring.

Bajaj Auto, alongside Austrian entrepreneur Stefan Pierer, co-owns Pierer Mobility, the parent firm of KTM. As part of its long-term commitment to the partnership, Bajaj is exploring ways to ensure KTM's financial stability. Rajiv Bajaj, Managing Director of Bajaj Auto, mentioned in a recent interview that his team has been engaged over the past several months in formulating a "sustainable solution" to address KTM’s financial challenges. He also hinted that Bajaj's equity stake in KTM, which is currently 49.9 per cent, could increase depending on the outcome of the ongoing negotiations.

Also Read: KTM Is Very Important For Bajaj Auto, Says Rajiv Bajaj

KTM has faced financial headwinds since last year, leading to a temporary shutdown of its main production facility in Mattighofen, Austria. Although a recovery plan was put in place, a parts shortage forced another production halt last month.

Despite these issues in Europe, KTM’s operations in India remain unaffected. The brand continues to launch new models, including the 2025 KTM 390 Adventure and 390 Enduro R. An additional model, the KTM 390 SMC, is expected to drop later this year. Additionally, Bajaj’s manufacturing plant in Chakan, near Pune, plays a crucial role in KTM's global supply chain, producing and exporting its 125cc to 390cc range of motorcycles.