Key assets will be acquired by Key Safety Systems.

Japanese automotive parts supplier and airbag maker Takata has officially filed for bankruptcy protection in Japan and the United States. During a special news conference in Tokyo, CEO Shigehisa Takada bowed in apology for the fall from grace.

"If things are left as is, we are aware of risks that we may not able to raise fund and to continue stable supply of products," he said in front of media representatives. "In light of the management environment we face, the state of negotiations with the sponsor candidate and carmakers, and the external expert committee's opinion, we have decided today to file for bankruptcy protection."

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Takada explained the company had no other choice but to sell its assets for cash, confirming U.S. supplier Key Safety Systems is buying “substantially all” of Takata’s global assets and operations for $1.59 billion (all figures USD).

"We spent much time on negotiations, it was extremely difficult to reach an agreement with more than 10 carmakers worldwide and a sponsor candidate company," Takada commented.

Currently, Takata is still in talks with automakers and the total amount of liabilities is still unclear, according to the company’s attorney Nobuaki Kobayashi. However, industry experts have revealed potential liabilities could be as high as $10 billion, covering penalties, ongoing recalls, and settlements. Early next year, Takata is expected to sign the final settlement with the U.S. Justice Department and to pay a penalty of up to $1 billion.

As far as the deal between Takata and Key Safety Systems is concerned, the U.S. company promises to retain all Takata employees and maintain operations in Japan. Also, the firm will continue to support Takata customers, suppliers, and employees and "embrace and honor Takata’s Japanese heritage."

"KSS is the ideal sponsor as we address the costs related to airbag inflator recalls, and an optimal partner to the company’s customers, suppliers and employees," Takada declared in an official statement.

Check out the press release section below for more details about the Takata - KSS deal.

Source: Takata and KSS via Automotive News

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