THE JAPAN NEWS



 

TOKYO (Bloomberg) —Takata Corp., the embattled Japanese air-bag supplier that’s put itself up for sale after triggering the auto industry’s biggest safety recall, aims to shortlist two to three candidates by October, according to people familiar with the process.

Bidders for Tokyo-based Takata have been asked to submit their proposals, said the people, who asked not to be identified because the information is confidential. Suitors include Carlyle Group LP, which is working with Chinese-owned air-bag manufacturer Key Safety Systems; Daicel Corp., a Japanese maker of air-bag inflators that’s jointly bidding with Bain Capital; and KKR & Co., they said.

The sale will be closely scrutinized by the world’s largest automakers, which are likely to spend the next several years recalling air-bag inflators that can rupture and shoot deadly shards at vehicle occupants. Takata set up a committee in February that’s been negotiating with its car-making customers, led by Honda Motor Co., on the costs related to replacing the defective parts linked to as many as 15 deaths worldwide.

“It may take time from now on given the need to reach agreement with various stakeholders,” said Shintaro Niimura, a credit analyst at Nomura Securities Co. “The Japanese carmakers, foreign carmakers, all have different interests.”

Some of the bidders are considering the possibility of some form of bankruptcy proceedings for Takata to mitigate the liabilities, said the people. A person with knowledge of the restructuring process said in May that Takata would seek to avoid bankruptcy and instead look for buyers that could take a controlling stake and carry the company through its crisis. Takata is working with Lazard Ltd.

Representatives at Takata, Lazard, Carlyle, Bain Capital and KKR declined to comment. Daicel said it couldn’t immediately comment. Calls to Key Safety System outside of regular business hours weren’t answered.
While KKR plans to make a bid on its own, it hasn’t ruled out working with a partner, said one of the people.