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 US auto parts maker Key Safety Systems Inc, Reuters reports, citing unnamed sources.
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.
Nikkei reported a new company created under Key will purchase Takata operations for about 180 billion yen (US$1.62 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.
Also at stake is US$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.
Major global car manufacturers have expressed concern about the company filing for bankruptcy without a deal in place because of disruption it could cause to the production of replacement air bag inflators.
More than 65 percent of 46.2 million recalled Takata air bag inflators in the United States have not been repaired.
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