KTM To Buy Back Stake From Bajaj for reasons unknown for now. Bajaj will very likely to continue manufacturer KTM bikes and share technologies
Indian bike maker Bajaj has started discussions with the Pierer Industries AG to explore the possibility of selling former’s 48% stake in KTM AG. If negotiations come to fruition, Bajaj will transfer its share from KTM AG to KTM industries AG. Just so you know, Pierer is the majority shareholder in KTM industries AG with the controlling 62% stake. KTM Industries AG, on the other hand, has a 51.7% shareholding in the KTM AG.
This revelation was made in a regulatory filing by Bajaj on Thursday wherein it said that the company would now examine this proposal in great detail in consultation with Pierer Industries AG. The filing also revealed that Bajaj is looking forward to executing this transaction in the second quarter of the fiscal year 2019 n which means we expect further announcement in this regard soon in future.
Further elaborating on the plan of transferring the stake, the regulatory filing added that KTM Industries AG would look into economic and legal requirements of such a deal, in addition to analyzing the capital contribution from the authorized capital structure of the company. A 50% increase in the existing share capital can be enabled with the help of authorized capital, the filing added.
If this deal is executed as per the plan, the stake of KTM Industries AG in KTM AG will go up from the existing share of 51.7% to approximately around 99.7%. Pierer Industries has set an ambitious target for the KTM brand to make it third largest bike maker in the world by 2020. In terms of total sales, KTM has witnessed impressive growth last year as it was able to sell 2.7 lakh bikes in 2018 compared to the sale of 2.4 lakh units in 2017 which translates into an annual sales increase of 12.5%.
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