The Japanese automotive part manufacturer Takata has filed for bankruptcy protection both in the United States and Japan after one of the biggest product recall the automobile market has seen. According to the company, they would be acquired by the US-based company Key Safety Systems for a couple of billion dollars.
The Tokyo-based safety automotive parts maker is currently facing a magnanimous amount of lawsuits and recalls; some of their airbags were linked to over 16 deaths all around the globe. According to some news, the company is looking at liabilities that are worth trillions of yen or whopping billions of dollars, although the company hasn’t confirmed this news and allegation.
The company said that “We’re in a very difficult situation, and we had to find ways to keep supplying our products,” and “As a maker of safety parts for the automobile industry, our failure to maintain a stable supply would have a major impact on the industry.”
On a statement by Takata after filing the bankruptcy with the Tokyo district court, “At a board meeting on June 26, our company decided to begin procedures in filing for bankruptcy protection,” The Company’s 12 subsidiaries that are based overseas also filed bankruptcy protection. According to the Tokyo Shoko Research Ltd, the company is currently sitting atop of 1.7 trillion yen worth of liabilities or $15 billion.
The Takata shares were suspended on Monday’s stock market opening market; this is due to the massive volatility they experienced last week. According to the Tokyo Stock Exchange, they would delist the company by July 27. The company also settled a whopping $1 billion on their penalties in the US; the charges were because of hidden dangerous defects on their airbag, the company pleaded guilty.
KSS, Takata Acquisition
The Key Safety System and Takata have been working on a deal for about 16 months now; KSS has agreed that they will be taking over Takata’s viable operations, and leaving the remaining operations to continue on making millions of replacement airbag inflators. KSS will also be managing Takata’s 60,000 employees that are scattered all around the world.
According to the KSS’ CEO Jason Luo, "Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seat belts and other safety products have not diminished," KSS also said that “We look forward to finalizing 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 KSS.”
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