(Reuters) -Bajaj Auto has entered a call option agreement with Pierer Group that will allow it to take a controlling stake in troubled Austrian motorcycle maker KTM, the Indian automaker said on Friday.
If fully exercised, this option would lead to the exit of Austrian businessman Stefan Pierer and his Pierer Group from KTM, marking the end of his three-decade-long tenure since taking over the company.
Under the agreement, Bajaj, which currently holds a 37.5% stake in KTM, can acquire a 50% stake in KTM’s parent company, Pierer Bajaj AG, from the Pierer Group for 50.7 million euros.
This option can be exercised partly or fully by May 31, 2026.
Pierer Bajaj AG owns 75% of Vienna-listed Pierer Mobility AG , the holding company for the KTM and Husqvarna motorcycle brands.
Bajaj, an investor in KTM since 2007, said it would take control of the Austrian company through a 800 million euro debt package aimed at reviving KTM, which filed for court restructuring proceedings in November as it grappled with severe liquidity issues amid declining sales.
($1 = 0.8832 euros)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Tasim Zahid)
