Major vehicle airbag manufacturer Takata Corporation of Japan, which
is facing a plethora of charges and law suits for its product recall following
a spate of accidents involving faulty airbags in cars, has filed for bankruptcy
protection in the United States and Japan. The company is also being substantially
acquired for $1.6 billion by the Michigan based and Chinese-owned Key Safety
Systems.
According to rough estimates, Takata's total liabilities stand at around
$15 billion. It is the biggest bankruptcy of a Japanese manufacturer. Takata airbag
inflators have been linked to several deaths and injuries around the world
because of faulty and dangerous bursting of airbags.
TK Holdings, its U.S. operations, filed
Chapter 11 bankruptcy in Delaware on June 25, 2017. The Japanese parent company filed for protection with the
Tokyo District Court a day later.
KSS to purchase majority of Takata assets for $ 1.588 billion
Meanwhile, Key Safety Systems (KSS), one of the leading brands in
automotive safety systems, has reached an agreement in principle with Takata
Corporation to sponsor a restructuring plan for the purchase of almost all of
Takata's global assets and operations. An aggregate purchase price of USD 1.588
billion has been agreed upon but is subject to certain adjustments at
closing.
KSS is a global leader in the system integration and performance of
safety-critical components to the automotive and non-automotive markets serving
the active safety, passive safety and specialty product sectors. KSS is headquartered in Sterling Heights,
Michigan, with a global network of 32 sales, engineering and manufacturing
facilities. The company has 5 main technical
centers located in China, Germany, Japan, South Korea, and the United States. .
While KSS will be
acquiring all of Takata's global assets, their tainted Phase-Stabalised
Ammonium Nitrate (PSAN) airbag inflators (collectively, "PSAN
Assets") have been excluded from this acquisition. The PSAN and related
operations may be run by a reorganised Takata after the transaction closing and
wound down at a later date. The combination of almost all Takata assets with
KSS would form a leading global safety systems supplier employing around 60,000
people in 23 countries.