Pierer/KTM - Simplification of Bajaj Auto shareholding structure
From a November 27 PIERER Mobility AG press release
Pierer Industrie AG holds more than 60% of the shares of PIERER Mobility AG - the listed company that holds approximately 51.7% of the shares of the operating company, KTM AG. Bajaj Auto International Holdings BV holds the other major stake in KTM AG - approximately 48% of the shares.
In a stock market advisory, Pierer Industrie AG (aka the Pierer-Group) and Bajaj announced that they have restarted discussions on possibility of restructuring the Bajaj stake, specifically reassessing the possibility of, in effect, transferring Bajaj's 48% stake in KTM AG up a level in Stefan Pierer's byzantine ownership structure to PIERER Mobility AG - with the Pierer-Group continuing to retain the controlling majority over PIERER Mobility AG.
The announcement stated that Pierer Industrie AG and Bajaj will now evaluate the proposals in detail.
Just in case the existing structure wasn't complex enough though already, as an apparent prelude to simplification it got even more complicated because, in a first step in preparation for this possible transaction, Pierer Industrie AG has contributed its 60% stake in PIERER Mobility AG to "PTW Holding AG" (as far as is known that is an altogether new and probably interim entity) through a "contribution in kind" - and which will therefore "thus become a direct 60% shareholder in PIERER Mobility AG.
"If a decision is taken to execute the transaction, PIERER Mobility AG 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% of the existing share capital. After the transaction, the stake of PIERER Mobility AG in KTM AG increases from currently 51.7% to approximately 99.7%".
It is to be hoped Bajaj understands this, because I'm not sure we here at International Dealer News do, as it appears to us that the Bajaj ownership stake is being moved one step further away from being a direct stake in the motorcycle business, and is, in effect, being diluted.
On March 3, 2020, the shares in PIERER Mobility AG started to be traded in the General Standard (main listing) of the Frankfurt Stock Exchange, in addition to the Austrian and Swiss markets. The shares were trading at around € 45.00 at that stage.
The move was made in order to increase the trading liquidity of the shares in the euro area - in other words to give Pierer/KTM better access to larger potential investment capital resources.
Since then the shares almost halved at the nadir of the COVID-19 stock market crash, bottoming out at around € 24.00. As at the date of this press release, they were trading at around € 55.00.
