Pierer Mobility Shares Plummet Due to KTM's Bankruptcy Filing

Pierer Mobility AG experienced a significant decline in its stock value following the announcement that its subsidiary KTM AG initiated its own insolvency proceedings in Austria. The motorcycle manufacturer revealed that it is facing a substantial financing gap described as "very high three-digit million euros." The company is currently working to negotiate a restructuring plan with creditors within a 90-day period.

As part of the restructuring efforts, Pierer Mobility outlined plans that include reducing production for KTM and gradually decreasing excess inventory. These measures aim to reduce the output of the company’s Austrian facilities to over 1 billion euros within the next two years.

The impact on Pierer Mobility's share price was severe, plunging 45% to 6.9 Swiss francs (equivalent to $7.8). This marks the company's sharpest single-day decline in history, increasing its year-to-date losses to 84%.

The financial challenges faced by KTM are part of a broader industrial crisis affecting Europe and a decline in motorcycle demand. Pierer Mobility’s parent company, Pierer Industrie AG, which is co-owned by Stefan Pierer and India's Bajaj Auto Ltd., is attempting to restructure its debt.

On Monday, the company filed a request to extend the maturity of its obligations to creditors amounting to approximately 250 million euros ($262 million).