Bajaj Auto’s hopes of acquiring a majority stake in specialized bike manufacturer KTM Power Sport AG have been stymied after CROSS Industries, the Austrian firm’s promoter, publicly declared it would not dilute its stake in KTM Power Sport AG.
Last week, KTM issued a press release stating that CROSS Industries would 'continue to hold more than 48 per cent of the shares in KTM Power Sports AG'. The release came a few days after Bajaj Auto bought another 0.2 per cent in the Vienna-listed company.
The announcement came just ahead of an extraordinary general meeting (EGM) scheduled for February 26 to discuss the planned increase in KTM’s share capital through a rights issue. The company aims to raise Euro 30-40 million through the issue, which will be spent on product development and plants.
Bajaj Auto currently holds 31.92 per cent in KTM, having first acquired a 14.5 per cent stake in 2007, which it raised to 31.72 per cent seven months ago. All purchases have been through the open market and from rights issue and not from the promoters.