Air bag maker Takata to file for bankruptcy this month: sources

Fri Jun 16, 2017 8:54am EDT
 
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By Jessica DiNapoli and David Shepardson

NEW YORK/WASHINGTON (Reuters) - Takata Corp, the Japanese company facing billions in liabilities stemming from its defective air bag inflators, is preparing to file for bankruptcy as early as next week as it works toward a deal for financial backing from U.S. auto parts maker Key Safety Systems Inc, sources said on Thursday.

Takata, one of the world's biggest automotive suppliers, has been working for months to complete a deal with Key Safety.

A person briefed on the matter told Reuters Key was expected to acquire Takata assets as part of a restructuring in bankruptcy.

The Nikkei business daily reported that a new company created under Key will purchase Takata operations for about 180 billion yen ($1.6 billion) and continue supplying air bags, seat belts and other products, leaving liabilities behind in a separate entity.

Takata declined to comment. Michigan-based Key, owned by Chinese supplier Ningbo Joyson, did not immediately respond to a request for comment.

The Tokyo Stock Exchange said on Friday it had suspended trading in shares of Takata following media reports of preparations for a bankruptcy filing. At its previous close, it had a market value of $360 million.

Also at stake is $850 million owed by Takata to major global automakers under a settlement agreed to earlier this year stemming from the automotive industry's largest ever safety recall.

Sources familiar with the matter, who asked for anonymity because they were not authorized to speak with the media, said a final deal with Key may not be reached before Takata files for bankruptcy. The company plans to begin proceedings in both the United States and Japan, the sources said.   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