Takata taps KSS as final
bidder for restructuring deal: sources
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[February 04, 2017]
By Maki Shiraki and Paul Lienert
TOKYO/DETROIT (Reuters) - Takata Corp
<7312.T> has selected Chinese-owned Key Safety Systems (KSS), a
U.S.-based auto parts supplier, as the final bidder to extend financial
support for the Japanese airbag maker, three sources with knowledge of
the process have told Reuters.
The steering committee leading the selection process told Takata's
automaker clients that it has tapped KSS, owned by China's Ningbo Joyson
<600699.SS>, to provide financial support for the company, the sources
told Reuters on Saturday. Both Takata and KSS declined to comment.
Takata has been seeking financial backers through the selection process
to help it deal with billions of dollars in costs related to the recall
of millions of potentially defective airbag inflators that have been
linked to at least 16 deaths globally.
Previously, Reuters and other media had reported that autoparts
suppliers including Sweden's Autoliv Inc <ALV.N> had been in the running
to bid for Takata.
Takata set up a steering committee last year to lead the process of
finding a backer, appointing investment bank Lazard ltd <LAZ.N> as an
advisor on the search.
![](http://archives.lincolndailynews.com/2017/Feb/04/images/ads/current/graue_preowned_013017.png)
Established in 2004, Ningbo Joyson produces a range of car parts from
steering wheels to electronic control units, and counts automakers
Volkswagen <VOWG_p.DE>, Ford Motor Co <F.N>, and General Motors Co
<GM.N> among its customers. It has been expanding its global operations,
acquiring German supplier Preh Group in 2011 and KSS last year.
FEW DETAILS
A successful bid could see KSS take some form of control over Takata,
which continues to struggle with the financial and corporate fallout of
the automotive industry's biggest-ever product recall, which began in
2008.
Reuters had previously reported that KSS was preparing to bid for Takata
with private equity firm Bain Capital.
With around 100 million of its potentially defective airbag inflators
slated for recall, the company has sought help from rivals including
Autoliv and Japan's Daicel Corp <4202.T> to supply replacement parts.
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![](../images/020417pics/busine81.jpg)
A logo of Takata Corp is seen with its display as people are
reflected in a window at a showroom for vehicles in Tokyo, November
6, 2015. REUTERS/Toru Hanai/File Photo
![](http://archives.lincolndailynews.com/2017/Feb/04/images/ads/current/castlemanor_lda_051916.png)
Last month, the company agreed to plead guilty to criminal wrongdoing in the
United States, where the majority of airbag-related deaths have occurred, which
resulted in a $1 billion fine. It also faces civil lawsuits.
Other people with knowledge of the restructuring process said no decision has
been made on the details of Takata's restructuring.
Potential bidders for Takata have favored a court-led turnaround of its Japanese
operations, which would cap their exposure to Takata's existing liabilities,
estimated by some analysts to be as high as $10 billion for recall costs alone.
Such an option could deal a huge blow to shareholders, including the founding
Takada family, a major investor. Last week, the company in a statement said it
opposed a court-led restructuring, which it says could disrupt its supply-chain
and impact its ability to pay suppliers.
The company is considering a bankruptcy filing for its U.S. unit TK Holdings,
sources told Reuters.
Separate sources have told Reuters that automakers, which have been footing most
of the recall costs, remain divided over whether a restructuring process should
be court-ordered or a privately-arranged agreement.
While a court-ordered process would ensure transparency in identifying Takata's
liabilities and offer automaker clients legal cover when convincing shareholders
to approve any deal, sources say carmakers may stand to recoup more recall costs
from Takata under a turnaround plan arranged out-of-court.
![](http://archives.lincolndailynews.com/2017/Feb/04/images/ads/current/ldn_business_directory_small_2016.png)
A senior executive at Honda Motor Co <7267.T>, Takata's biggest customer, on
Friday declined to comment on its preference for a restructuring plan, but said
any agreement should make the stable supply of replacement parts a priority.
(Additional reporting by Naomi Tajitsu in Tokyo; Editing by Sandra Maler and Sam
Holmes)
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