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KTM AND BAJAJ MULL CLOSER GROUP RELATIONS

KTM supremo Stefan Pierer’s parental holding company, Pierer Industrie, and Indian bike manufacturer Bajaj Auto have entered into discussions about the latter extending its participation to a significant shareholding and board role at group level in KTM Industries. BDN financial editor Roger Willis reports.

At the moment, Bajaj has a 48% stake in the group’s motorcycle and related component manufacturing arm KTM, comprising the KTM and Husqvarna bike brands along with WP Suspension. KTM Industries holds a controlling 51.7% of KTM’s shares. In turn, Pierer Industrie owns 62% of KTM Industries.

The proposal under assessment is for a transfer of Bajaj’s 48% slice of the action from KTM to KTM Industries, through a capital increase. This would leave Pierer still in majority control of KTM Industries, presumably by a similar proportion to the current state of affairs at the bike business. But KTM Industries would then have a 99.7% shareholding in that business.

Besides providing Pierer Industrie with additional funds to either load up its acquisitions war chest or pay down debt, such a transaction suggests that the free float of KTM Industries — which is listed on the Vienna and Zurich stock exchanges — might be eliminated and the company could go private.

Any explanation for why this move is being considered should be set against Stefan Pierer’s recently admitted desire to become a suitor for Ducati, should Volkswagen eventually decide to dispose of that particular non-core asset. Having cash-rich Bajaj more firmly on team would boost his endeavour substantially.    

 

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