Japanese media: Takata to file for bankruptcy on June 26
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Air bag maker Takata plans to file for bankruptcy protection under Japan's Civil Rehabilitation Act next Monday June 26, according to Japanese media. The company's total liabilities are expected to exceed US$ 9 billion following a massive global recall of air bags linked to deadly explosions.
In addition, Takata's U.S.-based subsidiary TK Holdings, based in the state of Michigan, will file for Chapter 11 bankruptcy.
Takata will continue operations under a new entity. A new company will be created under American parts maker Key Safety Systems, which is owned by China's Ningbo Joyson Electronic. The new company is to purchase nearly all of Takata's operations for about US$ 1.6 billion.
Honda Motor, Toyota Motor and Nissan Motor will continue to financially support Takata after it files for bankruptcy protection, in an effort to contain any loss of confidence in Japan's autoparts industry.
The country's three largest automakers, together with smaller players like Subaru and Mitsubishi Motors, had informed the embattled air bag maker that they would continue doing business with it based on existing contracts. They are also expected to speed up payment of accounts receivable to help Takata maintain its cash flow.
Honda has issued the most recalls of defective Takata air bag inflators among Japanese automakers, topping more than 50 million units, according to Tokyo-based Nakanishi Research Institute. Toyota and Nissan rank next.
In Mexico, Takata owns six plants located in the cities of Monclova, Torreon, Acuna, Agua Prieta and two facilities in Monterrey, where it also operates a Technical Center.