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Airbags

Takata Shares Soar After Report of KKR Interest in Airbag Maker

By
Reuters
Reuters
By
Reuters
Reuters
May 26, 2016, 5:32 AM ET

KKR & Co and other investors are in separate talks with a committee overseeing a restructuring of Japan’s Takata about a financial investment to bail out the embattled auto parts maker, people familiar with the matter said on Thursday.

Japan’s Nikkei newspaper reported earlier on Thursday that KKR (KKR) has proposed taking about a 60% stake in Takata (TKTDY) and has submitted a restructuring plan to the external steering committee tasked with the restructuring.

Takata and KKR spokeswomen declined to comment on the report, which drove up shares in the company by its daily limit to trade 21% higher.

The U.S. fund approached the committee, one source told Reuters.

Takata’s external committee said on Wednesday it had hired investment bank Lazard Ltd to lead restructuring efforts as the auto parts supplier potentially faces billions of dollars in costs stemming from a global recall of its inflators.

The Nikkei said the selection of a financial sponsor would require discussion with Takata’s automaker clients and stakeholders.

The company’s founding family owns nearly 60% of the firm, which was started by Takezo Takada in 1933 as a maker of parachutes and other textiles, and is now run by his grandson.

Reuters in April reported that Takata planned to draw up a shortlist of financial backers by August, and that it hoped to reach an agreement on its restructuring by mid-September.

Earlier this month, the U.S. Transportation Department and Takata confirmed that 17 automakers would recall another 35 million to 40 million air bag inflators by 2019—on top of 28.8 million recalled previously. Globally, more than 50 million inflators have been recalled so far.

KKR currently invests in Japanese companies, including in Panasonic Healthcare and Pioneer DJ Corporation.

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