Takata's search for a savior could drag into next year: sources

Mon Sep 26, 2016 6:09am EDT
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By Junko Fujita and Taro Fuse

TOKYO (Reuters) - The plan to sell beleaguered Takata Corp (7312.T: Quote) to a rescuer, slated by year-end, is likely to extend into next year as some bidders want to drag the air bag maker through bankruptcy to wipe out most of its debt, people with knowledge of the matter said.

But creditors such as Honda Motor Co Ltd (7267.T: Quote) are likely to resist any bailout that includes bankruptcy because they would have to swallow significant losses, the people said.

The ensuing tussle could take months to resolve, the people said, declining to be identified due to the sensitivity of the matter.

Takata faces about 1 trillion yen ($10 billion) in costs to recall potentially faulty air bag inflators worldwide, according to market estimates. There is also the prospect of legal liabilities related to the inflators which have been linked to at least 14 deaths, mainly in the United States.

The firm received bailout bids from five groups last week. Its steering committee hopes to name a sponsor next month and complete restructuring plans by December, the people said.

But that timeline is overly ambitious, they said, given the need to agree on how to share the losses among Takata's many stakeholders, which include creditors and both Japanese and foreign automakers.

A spokesman representing Takata's steering committee declined to comment.

Moreover, an investor is unlikely to be confirmed unless Takata files for bankruptcy, which would establish the extent of liabilities, one of the people said.   Continued...

The logo of Takata Corp is seen on its display at a showroom for vehicles in Tokyo, Japan, May 11, 2016. REUTERS/Toru Hanai