Bajaj Auto begins talks to swap stake in KTM with Austrian partner

Bajaj Auto on Tuesday said it has started preliminary discussion with its Austrian partner Pierer Industrie AG for simplifying their shareholding pattern in premium bike maker KTM by transferring their stakes to a new holding company.

At present, PIERER Mobility AG (PMAG) and Bajaj Auto's 100 per cent Netherlands subsidiary, Bajaj Auto International Holdings BV, hold 51.7 per cent and 48 per cent respectively in KTM AG.

Pierer Industrie AG holds over 60 per cent in PMAG, with the balance being free float.

"The proposal envisages Bajaj swapping its 48 per cent stake in KTM AG for a stake in PMAG and both Pierer Industrie and Bajaj moving their stakes in PMAG, to a new 'Holdco' between them," Bajaj Auto said in a regulatory filing.

The company further said discussions are "currently at a very preliminary stage and this disclosure is being made only by way of abundant caution".

"Bajaj will evaluate and decide on the proposal in due course, following due corporate processes such a deal entails," it added.

In a press statement last week, PIERER Mobility AG said Pierer Industrie AG in a first step will contribute its 60 per cent stake in PIERER Mobility AG to "PTW Holding AG" through a contribution in kind, which will thus become a direct 60 per cent shareholder of PIERER Mobility AG.

If a decision is taken to execute the transaction, PIERER Mobility AG said it will consider the legal and economic requirements and conditions of a capital increase by contribution in kind from the existing authorised capital of the company.

"The authorised capital enables a capital increase of up to 50 per cent of the existing share capital. After the transaction, the stake of PIERER Mobility AG in KTM AG increases from currently 51.7 per cent to approximately 99.7 per cent," the company added.

Through their partnership, Bajaj Auto sells the KTM bikes in India while also manufacturing bikes from the latter's DUKE and RC range at its Chakan plant, in Maharashtra.