A reported 16 deaths and 180 injuries have so far been attributed to exploding Takata airbags, caused by faulty canisters rupturing and sending metal shrapnel at the driver and passenger.
A total of 42 million vehicles, mostly in the US, have so far been recalled for faulty airbags, with the hardest hit being Honda and its luxury Acura division (11.6-million), Toyota (around six-million), Chrysler / Dodge / Ram (5.6-million) and Ford / Lincoln / Mercury (around three-million).
Subsequent recalls have also followed in South Africa notably from Subaru last year for 2004-2007 Impreza WRXs, and Mitsubishi in 2015 for the previous generation Lancer, and the Pajero earlier this year.
According to Automotive News, US supplier Key Safety System will acquire all of Takata's global assets and operations for a reported $1.59-billion, apart from operations and resources related to its manufacturing and sales of ammonium nitrate airbag inflators.
The article further states that the takeover would help Takata secure the funds needed to pay the $1-billion settlement imposed on it by the US Department of Justice in January this year, with the penalty consisting of a fine totalling $25-million, $125-million in compensation for the affected victims and $850-million to cover the costs of the automakers implicated in the recall.
"In light of the management environment we face, the state of negotiations with the sponsor candidate and carmakers, and the external expert committee's opinion, we have decided today to file for bankruptcy protection," Takata CEO Shigehisa Takada remarked at a press conference held in Tokyo on Monday.
"If things are left as is, we are aware of risks that we may not able to raise fund and to continue stable supply of products".
In addition to the bailout from the Sterling Heights, Michigan company, Takata will also receive a $227-million loan from the Sumitomo Mitsui Banking Corp, in the form of a debtor-in-possession financing scheme.
"The underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seat belts and other safety products have not diminished. We look forward to finalising definitive agreements with Takata in the coming weeks, completing the transaction and serving both our new and long-standing customers while investing in the next phase of growth for the new [Key Safety]," Key Safety System CEO, Jason Luo, was quoted in a statement as saying.
While no date has been given, the deal is expected to be closed during the first quarter of 2018.
IMAGE from ABC News
