The Japanese air bag manufacturer Takata Corp is fighting to stay afloat after the car industry’s largest ever recall, and it has prompted the firm to take primary bids from a list of investors ready to come to the rescue.
According to several anonymous sources close to the company, Lazard Ltd will be receiving rescue plans from a host of potential investors on Takata’s behalf which include, but are not limited to, Brain Capital, chemical maker Daicel Corp, electronic giants Joyson and KKR & Co.
At least 15 deaths have so far been reported linked to the company’s disastrous mistake of putting a volatile chemical inside the propellant used in their air bag system. The chemical was exploding inside the car and sending a deadly spray of shrapnel around the front compartment.
Takata are desperately seeking financial clout as they face billions of dollars in liabilities in upcoming court cases.
None of the companies involved in the potential buyout commented after email and phone call enquiries, and the sources preferred to remain un-named due to the sensitive nature of the affair.
The sources say Takata will attempt to narrow the amount of bids down to two by the end of September by setting up a steering committee to eliminate suitors. Over thirty organizations and business showed interest in the bailout arrangement after Takata announced they required a financial backer.
The winner of the bidding war will be responsible for keeping in check growing costs at the company and funding the restructuring of the business. Takata shares have plummeted well over 80 percent in the last two years.
“It’s been a torrid episode,” said Stuart Poulson, Head of corporate trading at Nikko-Desjardins Asset Management in a TV interview. “But it does represent a major opportunity to get some new blood, and cash, into the company and turn it around. Of course, the shares being at rock bottom prices won’t hurt potential investors either.”
Takata is one of the few dominant air bag makers in the world and many Japanese auto-manufacturers depend on the company to organize and refit the continuing recalls and to keep air bag prices down by providing on-going competition in the industry. As such, they have just about managed to stay in the red while their liabilities are pending.
