Pune-based two-wheeler manufacturer Bajaj Auto and its partner in KTM AG, Pierer Industrie, on Wednesday said they have signed contracts to simplify the shareholding structure in the premium bike maker KTM through a share swap agreement at the end of which Bajaj Auto will become an indirect stakeholder not only in KTM but also in the other brands like Husqvarna, Gas Gas and Ramon.
“In a first step, Bajaj Auto International Holdings B.V. (BAIHBV) has contributed 46.5% out of its approximately 48% share in KTM AG to PTW Holding AG (the majority shareholder of PIERER Mobility AG), owned by the Pierer Group. In return, BAIHBV has been granted 49.9% stake in PTW Holding AG,” the company said in a regulatory filing.
“In a second step, the 46.5% KTM shares now held by PTW Holding AG will be given to PIERER Mobility AG against the granting of new shares in the context of a capital increase through contributions in kind,” it added.
Prior to the deal, Bajaj Auto held 48% in KTM AG through its fully-owned Netherlands-based subsidiary Bajaj Auto International Holdings. Pierer Mobility AG (PMAG), a Pierer Group company listed on the Zurich and Frankfurt exchanges, held another 52% in KTM.
As part of the deal, Bajaj has swapped a 46.5% stake in KTM for a stake in PTW Holding, which holds 60% of PMAG. Thus Bajaj has become an indirect stakeholder in PMAG, which controls not only KTM but also Husqvarna, Ramon and Gas Gas brands. In return, Bajaj Auto International Holdings B.V. has been granted 49.9% stake in PTW Holding AG.
Following the transaction, the shareholding of PMAG in KTM has increased to 98.2% from 51.7%.
“The Management Board of PIERER Mobility AG has resolved to execute a capital increase against contribution in kind in the total amount of EUR 895 million, corresponding to 49.9% in the existing share capital, by making use of the authorised capital. In this context 11,257,861 shares will be issued at an issue price of EUR 79.50 per share, which is higher than the current stock market price.
The capital increase will be carried out exclusively against contribution in kind of KTM shares by PTW Holding AG and under exclusion of subscription rights of the other shareholders. The capital increase will be executed, subject to the approval of the supervisory board, in the second half of October,” the company said.
Both the companies initiated talks about the share swap in March 2019 but somehow the plan was not executed. In July this year, the companies announced that they had decided to carry out the complex share-swap agreement.