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| Takata Said to Ready Bankruptcy Filing Ahead of Sale to Rival | Takata Said to Ready Bankruptcy Filing Ahead of Sale to Rival |
| (about 2 hours later) | |
| TOKYO — Takata, the troubled Japanese airbag maker, is moving to file for bankruptcy protection as soon as next week in preparation for the company to sell itself to a rival, a person briefed on the matter said on Friday. | TOKYO — Takata, the troubled Japanese airbag maker, is moving to file for bankruptcy protection as soon as next week in preparation for the company to sell itself to a rival, a person briefed on the matter said on Friday. |
| Any such move has long been expected, as the company faces billions of dollars in liabilities stemming from the recall of millions of its airbags, some of which have burst violently, causing deaths and injuries. | Any such move has long been expected, as the company faces billions of dollars in liabilities stemming from the recall of millions of its airbags, some of which have burst violently, causing deaths and injuries. |
| Takata’s plans are still being ironed out, said this person, who requested anonymity to discuss confidential plans. But the company is contemplating filing for bankruptcy protection, first in Japan and then in the United States, as soon as next week, and in any case before its annual shareholder meeting on June 27. | Takata’s plans are still being ironed out, said this person, who requested anonymity to discuss confidential plans. But the company is contemplating filing for bankruptcy protection, first in Japan and then in the United States, as soon as next week, and in any case before its annual shareholder meeting on June 27. |
| It would then announce an agreement in principle to sell its business to Key Safety Systems, a Michigan-based auto parts maker owned by a Chinese company, the Ningbo Joyson Electronic Corporation. | It would then announce an agreement in principle to sell its business to Key Safety Systems, a Michigan-based auto parts maker owned by a Chinese company, the Ningbo Joyson Electronic Corporation. |
| Key Safety would pay 180 billion yen, or roughly $1.6 billion, the person said. Such a sale would take place within the confines of Chapter 11 rules in the United States, where Takata would leave the bulk of its liabilities with a legal entity in bankruptcy court while its operations are taken over by Key Safety. | Key Safety would pay 180 billion yen, or roughly $1.6 billion, the person said. Such a sale would take place within the confines of Chapter 11 rules in the United States, where Takata would leave the bulk of its liabilities with a legal entity in bankruptcy court while its operations are taken over by Key Safety. |
| Key Safety has been considered a front-runner among several manufacturers bidding for Takata’s operations, according to people familiar with the process. | |
| An earlier report on the potential plan by Nikkei, the Japanese financial daily, prompted a brief suspension of Takata’s shares on the Tokyo Stock Exchange. | An earlier report on the potential plan by Nikkei, the Japanese financial daily, prompted a brief suspension of Takata’s shares on the Tokyo Stock Exchange. |
| According to the Nikkei, that money would be used to cover Takata’s liabilities, including projected payouts from accident-related lawsuits, which would be held by a separate legal entity. | |
| The stock exchange placed an automatic stop on trading in Takata shares in response to the report. Takata declined to comment. Key Safety Systems could not immediately be reached for comment. | The stock exchange placed an automatic stop on trading in Takata shares in response to the report. Takata declined to comment. Key Safety Systems could not immediately be reached for comment. |
| Exploding Takata airbags have been linked to at least 11 deaths, and automakers have recalled tens of millions of vehicles equipped with Takata equipment, in what has become the largest auto safety recall in history. | Exploding Takata airbags have been linked to at least 11 deaths, and automakers have recalled tens of millions of vehicles equipped with Takata equipment, in what has become the largest auto safety recall in history. |
| Negotiations over Takata’s fate have been drawn-out and complicated, involving the founding Takada family as well as bankers, automakers and potential buyers. The company has pushed back self-imposed deadlines to resolve its financial crisis several times. |