Weeks after Japanese parts maker Takata reportedly began mulling the idea of restructuring through a sale that could include a bankruptcy filing amid the prospect of being saddled with billions of dollars in costs the company faces linked to its massive shrapnel-shooting airbag debacle, we’re learning more about what exactly the bankruptcy prospect means.
Reuters, citing sources close to the matter, reports that a bankruptcy option would be focused on the company’s Michigan-based assets, which account for half of Takata’s sales.
While a Takata-appointed steering committee has retained investment bank Lazard Ltd as an advisor to oversee its process, any kind of filing isn’t imminent.
The prospect of a bankruptcy filing has lingered over Takata since the costs related to its massive airbag recall began to mount. The company is facing billions of dollars in losses related to fines, penalties, repair costs, and other expenses.
“Our preference would be to restructure debts through an out-of-court settlement with creditors,” Takata CFO Yoichiro Nomura told reporters at a recent briefing. “This has been our position since the start, and has not changed.”
Still, Nomura said the company is open to all options, including a sale.
Last month, it was reported that five companies have offered initial investments of $1 billion to $2 billion each to buy the troubled airbag maker. Each of those offers contains some sort of mention of a proposed bankruptcy.
Those reports spurred concerns from lawmakers about how millions of vehicles would be fixed or who would foot the bill.
Senators Edward Markey (MA) and Richard Blumenthal (CT) teamed up to express their concerns in a letter to NHTSA, writing that any bankruptcy or restructuring may “not occur in a manner that prioritizes Takata’s ability to design and deploy safe replacements for the defective airbags over the short-term financial interests of any potential investor or buyer.”
The lawmakers called on the National Highway Traffic Safety Administration to use its authority in bankruptcy proceedings in order to uphold settlements and consent decrees.
by Ashlee Kieler via Consumerist