Declaration of patronage
However, two explosive letters have been received by KTM mother Pierer Mobility and the board members Stefan Pierer and Gottfried Neumeister on Saturday. The sender is the law firm of a major Austrian bank. “With the patronage declarations of August 1, 2024, Pierer Mobility has committed itself to financially equipped KTM AG, KTM Research & Development GmbH and KTM Components GmbH in such a way that they are always able to be able to meet their liabilities towards the bank,” says the two letters that were sent by email.
A patronage declaration is a written assurance, which is usually given by a parent company for its subsidiary in order to improve its creditworthiness towards banks, for example by accepting liability for open liabilities.
Supposedly caught by
“Although KTM is obviously unable to repay all due claims from the bank on his own, the Pierer Mobility has not complied with her (financial) equipment obligation from the patronage declaration,” the lawyers’ letters claim. “Rather, 50 million euros about a construction as a redemption of KTM demands towards Pierer New Mobility GmbH (…) have been caught past Pierer Mobility.”
The Pierer Mobility “as a guarantee and 100 percent corporate mother should have exercised all rights (…) in order to ensure the timely fulfillment of the liabilities from the business relationship with the bank,” it says. These rights fall a capital increase, a shareholder loan or the direct payment with any redemption of claims.
Explanation controversial
“The patronage declaration had the purpose that if the KTM fails, the performance is directly or indirectly expedient to the fulfillment of the liability by the Pierer mobility,” it says. In the case of KTM AG, the bank made 52.16 million euros plus $ 2.14 million. In the case of KTM Research & Development GmbH and KTM Components GmbH, it is 11.55 million euros. Makes a total of 64.67 million euros.
The bank has asked Pierer Mobility to pay the outstanding amounts until Monday, March 31, 2025. Otherwise, the bank is forced to assert these claims in court.
From the Pierer Mobility environment, it is said that said the patronage declaration “is very vague and controversial”.
