Amid ongoing fallout over the recall of its airbag inflators, the Japanese airbag maker Takata Corp. filed for bankruptcy protection in the United States and Japan and agreed to a takeover of most of its key assets by a rival, according to press reports.
In a statement, Takata said it was working with 14 vehicle manufacturers on “substantial accommodations” and “liquidity enhancements” to finance a restructuring, while entering into a deal to sell certain viable assets to Key Safety Systems for about $1.6 billion. Takata’s primary lender, Sumitomo Mitsui Banking Corp., will provide $227 million in debtor-in-possession financing.
The defective airbags have been linked to at least 17 deaths and prompted the biggest recall in the history of the auto industry.
“We believe taking these actions in Japan and the U.S. is the best way to address the ongoing costs and liabilities of the airbag inflator issues with certainty and in an organized manner,” Takata CEO Shigehisa Takada said in a statement.
No one knows the extent of Takata’s liability, which relates to the sale and manufacturing of “phase-stabilized ammonium nitrate” airbag inflators. But the cost of the fallout could run as high as $15 billion, according to an estimate by analysts from Tokyo Shoko Research.
The final cost will depend on the outcome of discussions with carmaker customers, according to a lawyer for Takata. An estimated 100 million inflators need to be recalled, and potential liabilities from class-action lawsuits remain.
Key Safety, in a statement, said it plans to retain substantially all of Takata’s employees. Takada said he and top management would ultimately resign. His family, which controls the company, would likely sell their shares, according to Reuters.