Takata rescue talks extended, even as bankruptcy risk looms

Fri Apr 14, 2017 12:04pm EDT
 
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By Taiga Uranaka and Maki Shiraki

TOKYO (Reuters) - Potential rescuers of Japan's Takata Corp have extended talks, already in their 14th month, for a deal to take over the air bag maker at the heart of the auto industry's biggest safety recall, people briefed on the process said.

Car-parts maker Key Safety Systems Inc (KSS) and Bain Capital LLC are the preferred bidder for Takata, whose faulty air bags have been blamed for at least 16 deaths worldwide.

Discussions that include the steering committee tapped by the air bag maker to oversee the search for a financial sponsor, automaker clients, suitors and bankers are now likely to run on until at least end-May, three people told Reuters.

The parties have already moved beyond an informal, self-imposed end-March deadline to thrash out a deal.

Recent talks, described by two participants as “chaotic”, have focused on issues such as an indemnity agreement to cover reimbursement costs for air bag recalls, estimated to be as high as $10 billion.

KSS, a U.S.-based maker of air bags, seatbelts and steering wheels, and Bain, a U.S. private equity fund, are still conducting due diligence, one of those close to the matter said.

Another said KSS - which was bought last year by China's Ningbo Joyson Electronic Corp - and Bain plan to offer around 200 billion yen ($1.8 billion) for Takata.

A spokesman for Takata and the steering committee declined to comment. A spokeswoman for KSS also declined to comment.   Continued...

 
FILE PHOTO: The logo of Takata Corp is seen on its display at a showroom for vehicles in Tokyo, Japan, February 9, 2017.  REUTERS/Toru Hanai/File Photo