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Takata makes progress selecting investor

By Staff reporter | 30 August 2016

Takata is inching closer to finding an investor to help dig it out of its airbag mire

Takata is inching closer to finding an investor to help dig it out of its airbag mire

Takata Corporation has identified up to seven potential investors to help refinance its operations, according to local reports, as the scale of the world's largest automotive recall has become apparent in the last year.

The list of potential investors in a restructured Takata has dropped to around half a dozen, from 30 at the end of June, which is seen as progress in the protracted efforts to turn around the struggling airbag manufacturer.

The problem with Takata's airbags is that some have exploded with excessive force, with flying shrapnel from the exploding casings linked to at least 14 deaths and multiple injuries worldwide.

The recall costs alone have escalated over the last year, with close to 100m vehicles globally having been recalled to replace the faulty airbags. The company will inevitably incur additional legal costs and compensation claims. Its share price has fallen by 90% since the scandal erupted in early 2014.

The latest chapter in this gruesome saga unfolded on Monday (29 August)  when a truck transporting Takata airbag inflators and a volatile chemical exploded in Texas, killing a woman bystander and injuring five other people.

Among the companies said to have submitted recovery proposals to Takata is Japanese chemicals company Daicel Corporation; Chinese component manufacturer Ningbo Joyson Electronic Corporation, which owns US-based airbag maker Key Safety Systems, and global fund managers KKR and Bain Capital.

Takata is being advised by investment bank Lazard and hopes to narrow the list of potential investors down to two by mid-September.