* Bankruptcy a key issue as bidders, creditors prepare to
* Bain-Daicel bid the biggest of the five - source
* Meetings key to Takata's survival in recall crisis
(Adds details, context)
TOKYO, Oct 11 Bidders for Japan's Takata Corp
will meet this month with the carmakers key to its
survival to consider options, including a $3 billion bid, at a
gathering that could determine the future of the air-bag maker,
people familiar with the matter said.
Takata is seeking a financial investor to help pay for huge
liabilities from the world's biggest auto recall, with defective
air-bag inflators linked to at least 15 deaths globally.
The meetings of the five bidding groups and carmakers, who
are Takata creditors and customers, will take place late this
month in New York, four people involved or briefed on the matter
told Reuters on Tuesday.
The bid from Japanese inflator maker Daicel Corp
and U.S. buyout firm Bain Capital, for more than 300 billion yen
($2.9 billion), is backed by Takata's steering committee of
Japan-based lawyers and consultants, said a person involved in
the process and one who was briefed on the matter.
That is the highest bid for Takata, the source briefed on
the matter said.
Automakers asked to meet directly with bidders, the sources
said, as differences over whether to put Takata through
bankruptcy complicate the discussions. Its $1.1 billion in
capital is dwarfed by recall liabilities of some $10 billion,
according to industry estimates, let alone potential legal
The tussle over bankruptcy is likely to delay by months
earlier hopes to name a rescuer this month and complete Takata's
restructuring plans this year, sources told Reuters last month.
Bidders include Sweden's Autoliv, a global rival for
Takata in air bags, as well as a partnership between U.S. parts
supplier Key Safety Systems and private equity firm Carlyle
Group, sources have said.
All five bidders last month presented restructuring plans
that would force the air-bag maker to file for bankruptcy
protection, people with knowledge of the process have told
Takata's share price, which has collapsed 89 percent since
early 2014 as the recall crisis escalated, fell 7.5 percent on
Tuesday on a report that the company is weighing bankruptcy in
the United States, where most of the recalls, deaths and
injuries linked to Takata's defective air bags have occurred.
Some automaker customers oppose bankruptcy because they
would have to swallow significant losses after shouldering the
bulk of recalls costs, sources have said.
Automakers are leaning towards Autoliv, the world's largest
supplier of air bags, which has ramped up its production
capacity of air-bag inflators to provide replacements parts as
Takata has struggled to keep up, said a source briefed on the
Toyota Motor Corp, Honda Motor Co, Nissan
Motor Co and Volkswagen will attend the
meetings, the sources said.
Also attending will be the steering committee, which is
overseeing Takata's restructuring discussions, and investment
bank Lazard Ltd, which is advising Takata on the
bidding, they said.
Daicel, Bain, Autoliv, KSS and Carlyle declined to comment
on matters related to Takata. A spokeswoman for Takata and
Lazard declined to comment.
A spokesman for Honda declined to comment, while a Toyota
spokesman reiterated the company's position that it was not in a
position to comment on Takata's financial situation. Nissan and
Volkswagen were not immediately available for comment.
Bidders are trying to come up with a plan which will enable
Takata to continue operating by drawing a line under its
liabilities while also continuing to supply parts to the
industry into the future.
Automakers around the world have been recalling vehicles
containing more than 100 million Takata inflators after it was
discovered that a chemical compound in their propellant can
explode violently, especially in vehicles with years of exposure
to hot, humid weather.
Increasing recalls and growing liabilities have increased
financial pressures on the company which has been run by the
founding Takada family since it was founded as a textile maker
The parts maker has booked an annual loss in three of the
past four years and been shedding assets to raise funds.
($1 = 102.9000 yen)
(Writing by Naomi Tajitsu; Additional reporting by Junko
Fujita; Editing by William Mallard and Louise Heavens)