Pierer Shares Slump as KTM Unit Files for Insolvency in Austria

By Marton Eder

November 26, 2024 at 10:20AM EST

An employee performs a test ride on an electric motorcycle at the KTM E-Cross Center in Mattighofen, Austria, on Monday, April 29, 2019. As Austria emerged from the rubble of World War II, KTM churned out inexpensive, durable two-wheelers to help a broken nation hit the road again. Photographer: Michaela Handrek-Rehle/Bloomberg (Michaela Handrek-Rehle/Bloomberg)

(Bloomberg) -- Shares of Pierer Mobility AG tumbled after the company said its KTM AG motorbike unit was filing for a self-administered insolvency in Austria.

KTM will be unable to cover a “very high three-digit million euro” financing requirement, according to a statement. The company will seek to agree with creditors on a reorganization in the next 90 days.

Shares slumped 45% to 6.9 Swiss francs ($7.8), heading for their biggest daily decline on record and extending a loss this year to 84%.

The company owned by entrepreneur Stefan Pierer and India’s Bajaj Auto Ltd. is facing financial strains due to a Europe-wide industrial crisis and lackluster demand for motorbikes. Its parent, Pierer Industrie AG, asked creditors on Monday to extend the maturity of almost €250 million ($262 million) in debt.

Pierer Mobility said the KTM overhaul will include the re-dimensioning of production and a gradual adjustment of excess stock, reducing output of Austrian sites by more than €1 billion in the next two years.