[payeng]

Big News This. Source: AutocarPro

Bajaj Auto plans to transfer its 48 percent stake in Austrian bike maker KTM AG to its parent company KTM Industrie AG. While KTM Industrie holds approximately 51.7 percent of KTM AG, Bajaj Auto International Holdings BV holds approximately 48 percent of KTM AG equity.

As per a discussion between Bajaj Auto and Pierer Industrie, an Austrian industrial investment group that is fully owned by Pierer Konzerngesellschaft mbH, both the companies plan to transfer Bajaj Auto’s current 48 percent stake in KTM to an equivalent equity stake in KTM Industrie. This way, Pierer Industrie will continue to hold 62 percent stake in KTM Industrie while KTM Industrie would increase its stake in KTM AG from the current 51.7 percent to 99.7 percent.

The entire transaction and the amount of shares that Bajaj Auto could possibly get in KTM Industrie, considering its investment value and KTM Industrie’s share price is still being calculated. The legal and economic requirements and conditions of a capital increase by contribution in kind from the existing authorised capital of KTM Industrie are being examined and the final decision is to be considered in the second quarter of 2019.

Question is Why?

Unlike Tata, whom of late JLR seems to have dragged down, Bajaj-KTM was sailing quite smoothly.

[timuseravan]

As far as I could gather Bajaj is not selling its shares in KTM.

Currently KTM AG is the company which makes the bikes and is owned about 48% by Bajaj. The rest (almost) is held by a holding company KTM Industrie.

Now Bajaj will transfer its 48% share in KTM AG to KTM Industrie. In return Bajaj will get shares of KTM Industrie. In this case it is a purely financial transaction.

[payeng]

Originally Posted by timuseravan

As far as I could gather Bajaj is not selling its shares in KTM.

Currently KTM AG is the company which makes the bikes and is owned about 48% by Bajaj. The rest (almost) is held by a holding company KTM Industrie.

Now Bajaj will transfer its 48% share in KTM AG to KTM Industrie. In return Bajaj will get shares of KTM Industrie. In this case it is a purely financial transaction.

I don't think the highlighted part (in bold) has been mentioned anywhere in the various news reports.

Another News Source for your reference: Bajaj could soon lose stake in KTM: How it’ll affect Bajaj-KTM in India

[timuseravan]

Originally Posted by payeng

I don't think the highlighted part (in bold) has been mentioned anywhere in the various news reports.

Its right there in the article you posted! And in other articles around the net.

plan to transfer Bajaj Auto’s current 48 percent stake in KTM to an equivalent equity stake in KTM Industrie

The entire transaction and the amount of shares that Bajaj Auto could possibly get in KTM Industrie, considering its investment value and KTM Industrie’s share price is still being calculated.

They haven't given any specific reasons for this transaction but generally they are done either for tax/regulatory purposes or to make it easier to raise debt (KTM Industrie is listed while KTM AG is not)

[payeng]

Originally Posted by timuseravan

They haven't given any specific reasons for this transaction but generally they are done either for tax/regulatory purposes or to make it easier to raise debt (KTM Industrie is listed while KTM AG is not)

The Answer is probably here, on KTM Industries Website: "PIERER INDUSTRIE AND BAJAJ IN DISCUSSIONS FOR BAJAJ TO PARTICIPATE AT KTM INDUSTRIES LEVEL"

Should allow Bajaj to be part of not just Motorcyles, but other aspects of KTM's business (eMobility, Parts, Design etc).