TOKYO (Reuters) - Japan's Takata Corp <7312.T>, the firm at the centre of the auto industry's biggest ever product recall, will file for bankruptcy protection in Japan on Monday with liabilities of more than 1 trillion yen (£7.05 billion), a source said.
The decision came at a special meeting of the air-bag maker's board, public broadcaster NHK said. The Nikkei business daily also reported the decision to file in Japan, without citing its sources.
Takata's U.S. arm filed Chapter 11 bankruptcy in Delaware with liabilities of $10 billion to $50 billion (£7.8 billion to £39.2 billion), a court filing showed. The firm would file a similar procedure in Japan in the coming hours, a source with knowledge of the matter told Reuters.
The filings would open the door to a financial rescue from U.S.-based auto parts supplier Key Safety Systems, which Takata has tapped as its preferred financial sponsor as it must keep churning out millions of replacement air-bag inflators.
It also faces billions in lawsuits and recall-related costs to its clients, including Honda Motor Co <7267.T>, BMW , Toyota Motor Corp <7203.T> and others which have been paying recall costs to date.
Faulty air-bag inflators made by the 84-year-old Japanese company have been linked to at least 17 deaths and more than 180 injuries around the world. The ammonium nitrate compound used in the airbags can become volatile with age and prolonged exposure to heat, causing the safety devices to explode.
Global transport authorities have ordered about 100 million inflators to be recalled, a process that has dragged on for nearly a decade. Industry sources have said that recall costs could climb to about $10 billion.
Costs so far have pushed the company into the red for the past three years, and it has been forced to sell subsidiaries to pay fines and other liabilities.
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