Bajaj eyes EV tech access via KTM JV2 min read . Updated: 02 Dec 2020, 08:30 AM IST
- The restructuring will see the two companies transfer their respective stakes to a new holding company that will be owned 60% by Pierer Industrie AG and the rest by Bajaj Auto
Bajaj Auto Ltd is looking to access electric vehicle (EV) technologies through a proposed restructuring of its joint venture (JV) with Pierer Industrie AG in Austrian motorcycle maker KTM AG, a senior executive at India’s fourth-largest two-wheeler maker said on Tuesday.
This followed the Pune-based firm announcing earlier in the day that it has resumed talks with Pierer Industrie to revamp their partnership by transferring Bajaj Auto’s stake in KTM to Pierer Mobility AG (PMAG).
Pierer Mobility has a 51.7% stake in KTM, the maker of motorcycles under KTM, Husqvarna, GasGas brands. Bajaj Auto holds a 47.99% stake in KTM. Owned by industrialist Stefan Pierer, Pierer Industrie holds a more than 63% stake in Pierer Mobility with the balance held by the public and other investors.
The restructuring will see the two companies transfer their respective stakes to a new holding company that will be owned 60% by Pierer Industrie AG and the rest by Bajaj Auto.
“The proposed restructuring will simplify Bajaj Auto’s shareholding structure in the KTM Group. You see besides KTM AG, the parent company Pierer Mobility has several other subsidiaries including Pexco, which makes electric bikes," a senior executive at Bajaj Auto said, indicating the company’s plans to access EV technologies. The executive declined to be named.
“Pierer Mobility was informed by Pierer Industrie AG and Bajaj that they have restarted discussions on assessing the possibility of transferring Bajaj’s 48% stake in the operating KTM AG to PMAG, with the Pierer Group continuing to retain controlling majority over PMAG," it said in a regulatory filing.
Bajaj Auto and Pierer Industrie began talks in March last year over the possible stake swap. The talks were, however, put on a pause as PMAG continued to consolidate its holdings comprising several subsidiaries.
This saw PMAG induct electric bike maker Pexco GmbH as a wholly owned subsidiary in December 2019. The acquisition represented early steps by PMAG towards achieving two-wheeler electrification as it drew plans for Pexco to achieve sales of €100 million in 2020.
“Bajaj Auto’s intent behind swapping its stake from KTM to its parent company is to get better access to the EV technologies as Pierer Mobility also has a subsidiary named Pexco, which produces and sells electric bikes," said Aditya Jhawar, an analyst at Investec Capital Services India Pvt. Ltd.
He said being from KTM, the EV technologies are likely to be more sophisticated and could be used in electric motorcycles as well. “There are many electric scooter manufacturers, but very few companies make electric bikes globally," Jhawar said.
As part of the proposed transaction, Pierer Industrie would contribute its 60% stake in PMAG to “PTW Holding AG", a new JV with Bajaj Auto, thereby becoming a direct 60% shareholder of PMAG.
“If a decision is taken to execute the transaction, PMAG will consider the legal and economic requirements and conditions of a capital increase by contribution in kind from the existing authorized capital of the company. The authorized capital enables a capital increase of up to 50% of the existing share capital," Pierer Industrie said in a regulatory filing.