Troubled airbag maker Takata close to bankruptcy filing: report

Japan's Takata is considering a bankruptcy filing for its US unit as the air bag maker looks for a sponsor to help pay for liabilities related to its faulty inflators, a person briefed on the matter told Reuters.

Takata, which has retained investment bank Lazard as an adviser, has been working to choose a backer for its turnaround as it faces huge costs related to the global recall of millions of potentially faulty inflators.

It is struggling to supply replacement parts for its potentially defective inflators, which have been linked to at least 16 deaths worldwide, mainly in the United States, and have led to the industry's largest ever recall.

A Chapter 11 filing for its US unit, Michigan-based TK Holdings, which accounts for nearly half of Takata's global sales, was one option it was considering although no filing was expected soon, the Reuters source said.

A filing would not be imminent because the company still had to select a sponsor and finalise terms and reach an agreement with automaker creditors, the source said.

The inflators in question use a chemical compound which can explode after prolonged exposure to hot conditions, spraying metal shrapnel. About 100 million have been ordered to be withdrawn globally.

Meanwhile, trading in Takata shares was halted today after the Nikkei business daily initially reported it was preparing for a possible bankruptcy filing.

Takata said in a statement that it had nothing to announce in relation to the media report.

Takata announces its first-half financial results later in the day, with the focus on whether it revises its full-year outlook and its cash position.

It anticipates a net profit of ¥13.0 billion ($126.04 million) in the year to March, although this largely excludes the impact of the recalls as the company so far has only outlined a small number of related liabilities.

As of March, it held ¥57.61 billion in cash and cash equivalents, down 24 per cent from a year ago.