Takata said to ask to pay recall costs through installments

Takata Corp asked automakers to let the company pay costs related to its recalled air bags by installment and is meeting with bankers almost every day to ensure it has enough cash flow, according to an analyst who attended a company briefing. 

PHOTO: REUTERS

MAY 15, 201510:12 AM

[TOKYO] Takata Corp asked automakers to let the company pay costs related to its recalled air bags by installment and is meeting with bankers almost every day to ensure it has enough cash flow, according to an analyst who attended a company briefing.

The carmakers are close to agreeing to the installment proposal, which will allow the company to avoid paying large sums of money at one time, Takata Chief Financial Officer Yoichiro Nomura told analysts on Thursday in Tokyo, according to the person. As of the fiscal year ended March, Takata hasn't breached conditions that would allow its banks to call back loans, Nomura said, according to the person, who asked not to be named as the meeting wasn't open to the media.

Hideyuki Matsumoto, a Takata spokesman, declined to comment when reached by phone. Hitoshi Sano, head of investor relations at the company, didn't return calls and e-mails.

Takata fell 3.8 per cent to 1,458 yen as of 9.09am in Tokyo, wiping out the shares' year-to-date gains. The stock is down 0.2 per cent since Jan 1, compared with a 14 per cent gain by Japan's benchmark Topix index.

Takata is at the center of a safety crisis engulfing the global auto industry. Its air bags have been found to deploy abnormally, causing breakage and shooting shrapnel at motorists. The defect has been linked to at least six deaths and more than 100 injuries, with automakers recalling more than 28 million vehicles so far.

Honda Motor Co, Takata's biggest customer, said Thursday in Tokyo it is replacing driver-side inflators in the latest recalled vehicles with parts made by Autoliv Inc. and Daicel Corp.

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