Takata to file for bankruptcy Monday, SMBC to provide bridge loan

Xavier Trudeau
Juin 22, 2017

In addition to filing for bankruptcy protection, Takata plans to ask Sumitomo Mitsui Banking Corp. and other lenders for financial support worth as much as tens of billions of yen, to help its suppliers' financing and prevent them from slipping into bankruptcy.

Takata, at the centre of the auto industry's biggest-ever safety recall, finished at 244 yen ($2.20), tumbling by almost 25 percent - its maximum daily loss limit - on the Tokyo Stock Exchange, after eye-popping falls on Monday and Tuesday.

Indonesia has been pushing multinational technology firms to be locally incorporated, arguing that companies such as Alphabet Inc's Google set up small business entities to provide "auxiliary" services and get away with minimal taxation, while booking most of their revenue from the country elsewhere.

On Wednesday, Jiji Press reported the airbag maker will file for bankruptcy protection on Monday, while other media suggested it could come as early as this week.

Any filing would coincide with a deal for financial backing from USA vehicle parts maker Key Safety Systems.

Takata plans to begin bankruptcy proceedings in both the U.S. and Japan, sources have said.

Takata's US-based unit TK Holdings is also expected to file for Chapter 11 bankruptcy.

The Tokyo-based firm was suspended from trading on Friday pending a response to the Nikkei story and other similar reports.

Takata has already agreed to pay a billion-dollar fine to settle lawsuits in the United States over its defective airbags, which have been linked to at least 16 deaths and scores of injuries globally.

The scandal has involved nearly every major global automaker, including top client Honda, which has already written down huge costs linked to the crisis.

The new company created under Key Safety would reportedly buy Takata's operations and continue supplying airbags, seat belts and other products.

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