Takata taps KSS as final bidder for restructuring deal - sources (updated)
04/02/2017 04:39
* U.S.-based parts supplier owned by China's Ningbo Joyson
* Takata at centre of global airbag recall, seeks financial
rescue
* Takata struggles to supply replacement parts, repay recall
costs
(Adds details on sponsor search process)
By Maki Shiraki and Paul Lienert
TOKYO/DETROIT, Feb 4 (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.
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. urn:newsml:reuters.com:*:nL4N1F85ZM
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.
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. urn:newsml:reuters.com:*:nL1N1F3140
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 favoured 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. urn:newsml:reuters.com:*:nL4N1D45WT
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.
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.
urn:newsml:reuters.com:*:nT9N1EA027
(Additional reporting by Naomi Tajitsu in Tokyo; Editing by
Sandra Maler and Sam Holmes)
((naomi.tajitsu@thomsonreuters.com; +81364411078; Reuters
Messaging: naomi.tajitsu.thomsonreuters.com@reuters.net))
Keywords: TAKATA RESTRUCTURING/