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Air bag maker Takata to file for bankruptcy this month, sources

17 June 2017

Following the news, Takata stock was for the time being suspended on the Tokyo stock exchange.

The company could file for bankruptcy next week, with Key Safety Systems involved in a financial deal to secure continued operations for a restructured company.

At least 15 people have died in accidents involving Takata air bag inflators in the United States and other countries.

Trading in scandal-hit airbag maker Takata was suspended Friday in response to a report that it is set to file for bankruptcy protection as early as this month and sell its assets to a USA company.

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Takata (TKTDY), the Japanese auto parts firm, is expected to file for bankruptcy protection as early as this month, likely representing the largest corporate failure in Japanese manufacturing in the post-war era, Nikkei Asian Review reports.

Takata is still building replacements required under a recall of around 100 million inflators that could detonate with excessive force after prolonged exposure to heat. They also have been blamed for more than 180 injuries worldwide. Michigan-based KSS, owned by Chinese supplier Ningbo Joyson Electronic Corp 600699.SS , now is a smaller competitor to Takata in airbags and seatbelts. The settlement includes a $25 million criminal fine, $125 million in victim compensation and $850 million to compensate automakers who have suffered losses from massive recalls. Completing the task of replacing all faulty inflators in the U.S. could cost as much as $8 billion, a United States judge claims. But then again, it's critical to highlight that there's no telling if Takata is really planning to file for bankruptcy. The automotive parts supplier is facing an $850 million payment to auto makers, as part of a settlement for a U.S. Justice Department criminal probe. Bill Nelson states that almost two-thirds of faulty Takata airbags nationwide continue awaiting repairs.

Automobile industry analysts say the number of vehicle recalls prompted by faulty Takata air bags would eventually exceed 100 million units globally. The manufacturer continued to sell its inflators and automakers continued to make use of them well after the issue found to be endemic, with 2016 model year vehicles being released and put on the growing recall list nearly immediately. In March, Toshiba Corp.'s US nuclear unit Westinghouse Electric filed for Chapter 11 bankruptcy.

Air bag maker Takata to file for bankruptcy this month, sources