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Takata looks at bankruptcy protection for its US unit - report

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By Euronews
Takata looks at bankruptcy protection for its US unit - report

Takata is reportedly considering filing for bankruptcy protection for its US division.

The Japanese air bag maker wants to buy time as it looks for a financial backer.

A sponsor will be need to help pay for liabilities related to its faulty airbag inflators.

Reuters reports a Chapter 11 filing for its US unit, Michigan-based TK Holdings was one option it was considering although no filing was expected soon, the source said.

TK Holdings accounts for nearly half of Takata’s global sales.

Replace 100 million inflators

Takata has been ordered to replace around 100 million potentially dangerous inflators but does not have the money to do that.

Faced with massive debts it is trying to reach an agreement with its carmaker customers over a restructuring.

“Our preference would be to restructure debts through an out-of-court settlement with creditors. This has been our position since the start, and has not changed,” Takata CFO Yoichiro Nomura told reporters at a results briefing.

“Aside from that, we’re open to all options.”

He added that an out-of-court settlement would be preferable to a court-ordered bankruptcy for all of the company’s global operations as it would ensure a stable supply of inflator replacement parts required in the recall.

Rescue and restructuring

The tussle over bankruptcy is likely to delay by months the naming of a rescuer and completion of Takata’s restructuring plans that were earlier expected to be finished this year, sources told Reuters last month.

Bidders for the company include Japanese inflator maker Daicel Corp and Sweden’s Autoliv, sources have said, while its creditors include the world’s largest automakers including Honda, the Renault/Nissan alliance and Ford.