Now that Takata has reached a deal with the United States Justice Department, the Japanese supplier is working to sort out the financial implications of its massive airbag recall.
Takata is expected to file for bankruptcy in the near future before selling its production operations to a newly formed company to pay off its debts to creditors, according to Nikkei. Fellow Japanese companies Honda and Toyota are among some of the major entities Takata is endebted to.
Key Safety Solutions, U.S. subsidiary of China-based Ningbo Joyson Electronic, was selected by an independent review committee to sponsor the  turnaround. After conferring with Toyota and Honda, Key Safety reportedly decided it will invest roughly 200 billion yen ($179 billion), which Bain Capital will help it acquire, to start a new company that will purchase Takata’s operations.
One of the key suppliers in the automotive industry, Takata agreed in February to pay $1 billion in penalties to the Justice Department and plead guilty to wire fraud. However, 10 major automakers have shouldered the brunt of the costs directly associated with its recall, reportedly totaling roughly 1.3 trillion yen ($11.66 billion).
Takata reportedly wanted to settle those debts in private, rather than through court proceedings, but its creditors preferred otherwise.
“We cannot accept a process without high transparency — we have a responsibility to explain (any settlement)Â to our shareholders,” an unnamed executive from a Japanese automaker told Nikkei.
The bankruptcy proceedings reportedly won’t force manufacturers to front anymore of the costs, leaving Takata responsible liabilities it would be required to pay down with proceeds from its sale.
Thumbnail photo via Daimler
