Takata to file for bankruptcy

Japanese air bag maker Takata Corp is preparing to file for bankruptcy as soon as next week, while the company works towards a deal to secure financial backing from American car parts maker Key Safety Systems, Reuters has reported. The deal with Key Safety has been going on for months, and Reuters claims Key is expected to acquire Takata assets as part of the bankruptcy restructuring. Nikkei reported a new company created under Key Safety will purchase Takata operations for $2.25 billion and will continue supplying air bags, seat belts and other products to car makers, and leave the legal liabilities behind in a separate entity. A $1.2 billion settlement between Takata and major global car makers agreed to earlier this year is potentially at stake. The settlement was part of the largest-ever safety recall in automotive history, with 100 million cars affected by the faulty air bag inflators. The deal between Takata and Key Safety systems may not be reached before the Japanese company files for bankruptcy next week, and major car makers have previously expressed concern that should Takata file for bankruptcy before a deal is in place, it may affect the production of replacement air bag inflators. A US judge has earlier said the costs of replacing all faulty Takata air bag inflators could exceed $11 billion. In New Zealand, over 110,000 affected vehicles have been identified, which includes both new and used cars. As of March this year, just 22 per cent of owners have been told a replacement is available.