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Report: Takata’s U.S. Unit Preparing for Bankruptcy Filing
The U.S. arm of airbag supplier Takata Corp. is preparing for a possible bankruptcy filing, according to The Nikkei, which cites no sources.
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The U.S. arm of airbag supplier Takata Corp. is preparing for a possible bankruptcy filing, according to The Nikkei, which cites no sources.
The newspaper says the move by the company’s TK Holdings Inc. unit in Auburn Hills, Mich., could facilitate Takata’s efforts to clarify its liabilities and secure an investor.
The company is struggling with the impending financial impact of campaigns by more than a dozen carmakers to recall roughly 100 million Takata airbag inflators that could explode in a crash. The cost of the recalls could total more than 1 trillion yen ($9.7 billion).
Takata’s likely share of repair and legal liability costs remains unclear. But The Nikkei says Takata’s financial advisers have urged potential investors to offer turnaround plans that include a Chapter 11 bankruptcy filing by the company’s U.S. unit.
TK Holdings generated about 30% of Takata group sales in the last fiscal year, according to The Nikkei. But the unit has reported four consecutive annual losses because of the recalls. The subsidiary currently has about $1.4 billion in liabilities compared with $1.1 billion in assets.
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