Japanese air bag maker Takata Corp. plans to file for bankruptcy protection soon, possibly next Monday, to address massive liabilities from a global recall of its air bags, sources close to the matter said Thursday.
But Takata has yet to reach an agreement on the timing with carmakers that are pushing it to make the move sooner, the sources said.
Takata is set to ask financial institutions including Sumitomo Mitsui Banking Corp. for a bridge loan of tens of billions of yen that will help the company rehabilitate after the bankruptcy filing, people familiar with the matter said.
Takata shares plunged 54.9 percent Thursday amid reports the troubled air bag maker will file bankruptcy early next week.
With liabilities exceeding 1 trillion yen ($9 billion), Takata's bankruptcy would be the largest by a Japanese manufacturer in the postwar period.
In order for Takata to continue supplying air bags, automakers will help its restructuring by shouldering most of the recall costs.
The Japanese manufacturer is set to separate its healthy operations, including those making seatbelts and child seats, into a new entity with Chinese-owned U.S. auto parts manufacturer Key Safety Systems Inc. sponsoring the company's turnaround.
By devising a solid restructuring plan, Takata also hopes to stabilize its supply chain and calm subcontractors shaken by reports it plans to seek court protection from creditors.
Takata had been seeking out-of-court proceedings but judged it difficult to reach an agreement with automakers, a steering committee with outside experts and Key Safety Systems. These parties prefer court-led restructuring to ensure transparency in the process.
According to informed sources, Takata has apparently been struggling to iron out differences within the company over restructuring plans and has not been able to put the necessary papers together for the procedures.
