KTM to Sell Stake in MV Agusta Following Acquisition and Bankruptcy Threat

6 days ago | 5 Views

KTM has recently revealed its intention to enter self-administration amid the impending risk of bankruptcy. A significant initial decision in this restructuring effort will involve the sale of its interest in MV Agusta. This announcement followed a crucial meeting with unions at Confindustria Varese on December 9, 2024, during which KTM stated that MV Agusta "is no longer regarded as a strategic asset" for the Austrian firm.

KTM To Divest Stake In MV Agusta

The trade union has announced that the production activities of MV Agusta will be relocated to the Varese facility; however, the entire process is expected to take approximately 90 days to complete, with the transfer finalized by March 2025. This divestment is anticipated to assist KTM in lowering expenses, although the total costs will remain considerable.

MV Agusta will continue selling existing stocks of motorcycles currently in Austria while its plans to add three more models from mid-March 2025 to be built at its home in Varese — MV Agusta will maintain the sale of its current inventory of motorcycles in Austria while planning to introduce three additional models starting in mid-March 2025, which will be manufactured at its facility in Varese. This period is crucial for MV Agusta as it undergoes a transition. The company has indicated that the initial months of 2025 will focus on selling two existing motorcycle models, with a total stock of 2,000 units in Austria. Concurrently, the brand aims to commence production of three new motorcycle models, targeting an output of approximately 3,000 units from mid-March onward to prevent the accumulation of excess inventory.

These significant changes will also prompt MV Agusta to expedite its three-year development plan beginning in 2025, ensuring long-term sustainability. The company relies on external funding sources for its cash flow. Furthermore, MV Agusta has highlighted that the leadership will prioritize training and development to mitigate the risk of encountering financial challenges similar to those experienced in the past.

Pierer Mobility Acquired a 50.1% Stake In MV Agusta In March 2024

Pierer Mobility, the parent organization of KTM, secured a stake in MV Agusta in March 2024. The company had raised its ownership in MV Agusta from 25.1 per cent in November 2022 to 50.1 per cent earlier this year. In October 2023, KTM AG assumed control of the purchasing and supply chain for the Varese-based manufacturer, in addition to managing the distribution channels for MV Agusta's motorcycles. With KTM's involvement, it was anticipated that the Italian motorcycle manufacturer would stabilize its operations and boost production to 10,000 units.

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The divestment presents an opportunity for a prospective new owner of the renowned Italian performance motorcycle brand, MV Agusta. The company is actively seeking a suitable buyer who can contribute to stabilizing its operations and ensuring long-term sustainability, including the advancement of new product development. This transitional phase is expected to be particularly noteworthy, as 2025 is poised to be a pivotal year for the manufacturer.

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