Takata, the 84-year-old Japanese auto supplier responsible for the largest safety recall in history, plans to file for bankruptcy, possibly as soon as next week according to Bloomberg:
The supplier is expected to seek protection in its home country first, with its U.S. subsidiary filing for Chapter 11 bankruptcy shortly thereafter, according to a person familiar with the matter, who asked not to identified because the matter isn’t public and the timing could change. Trading on Takata shares were suspended by Tokyo Stock Exchange from 8:20 a.m. to confirm the authenticity of media reports, the exchange said on its website.
Bankruptcy also puts Takata one step closer to a likely sale to American airbag maker Key Safety Systems, who a Takata steering committee recommended as their preferred bidder. Restructuring the struggling company will be costly, hence the need for a sale.
This isn’t too surprising given that the company accepted a settlement that would cost them $1 billion when they pled guilty to fraud over the defective airbags in February. Faulty Takata airbag inflators were linked to at least 17 deaths worldwide, and the company has had to replace over 100 million defective airbags worldwide.
By: Stef Schrader (Jalopnik).
Photo: Car List.
Review: Emerging Market Formulations & Research Unit, Flagship Records.