Takata Set To File For Bankruptcy Soon

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Takata Set To File For Bankruptcy Soon

Takata is planning to file for bankruptcy as soon as next week as the company negotiates for a deal with Key Safety Systems to acquire the former's assets. Earlier, plans of Takata filing for bankruptcy was reported by Nikkei and Bloomberg. 

Following the largest ever vehicle safety recall involving airbags inflators that explode and send shrapnel into cabins, Takata's liabilities have exceeded $9.2 billion. Key Safety Systems, according to the report by Nikkei, will purchase Takata for $1.62 billion and will continue to supply airbags, seat belts and other safety products under a new entity created under Key Safety Systems. Whatever that is left of Takata will be responsible for the recall-related liabilities.

Faulty Takata airbag inflators are responsible for the death of at least 16 people and more than 180 injuries globally, as of October 2016. Worldwide, Takata have recalled roughly 100 million faulty airbag inflators, with the whole process said to cost Takata 1.3 trillion Yen. To date, Takata has compensated $125 million to a victims' compensation fund and $25 million in fines. 

Key Safety System was selected by Takata as the preferred buyer for the company and both companies have been working on a restructing project.

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