Japanese airbag manufacturer Takata has filed for bankruptcy protection in a court in Tokyo and the US after multimillion-dollar losses caused by defective devices, the company announced on Monday.
The decision was taken by Takata's board of directors, prompting the Japanese stock regulator to suspend trading of the company's shares after they had fallen by nearly 80 per cent since mid-June, Efe news reported.
Takata's payment obligations exceed 1 trillion yen ($9 billion), making the bankruptcy of the airbag manufacturer the largest of a Japanese manufacturing company to date.
Filing for bankruptcy will facilitate the restructuring of this debt, avail itself of the protection under the Japanese legislation and avoid insolvency, and they will request emergency financial assistance from Japanese entities to continue its activities, the company said.
TK Holdings, a US-based subsidiary of the company, has also filed for bankruptcy in the US, and says that it will receive financial backing for its restructuring by US-based Key Safety Systems, according to Takata.
Founded in 1933, Takata is one of the world's largest providers of airbags and other road safety devices, and has been experiencing severe economic difficulties since 2008 due to the defects detected in the metal capsules in which the airbags are housed.
The faulty products can explode with too much force, shooting out fragments that could, and did, harm vehicle occupants.
The error, which led to the company losing multi-million dollars on device replacement, penalties and sanctions, has been linked to at least a dozen deaths, and has affected vehicles of more than 10 automobile manufacturers.
--IANS
ksk
Disclaimer: No Business Standard Journalist was involved in creation of this content
