The deal excludes certain assets and operations that relate to Takata's manufacturing and sale of phase-stabilized ammonium nitrate airbag inflators. So far 17 deaths have been linked to the issue, 11 of them in the U.S.
"The big risk", Rasmussen said, "is how much are the assets worth versus what's the cost to do the replacements".
While Takata Corp.'s bankruptcy filing appears to have it on course to someday regain financial stability, questions remain about the turnaround as the company still faces potential additional costs from recalls and litigation.
The company has a market value of about $120 million and already faces debt and penalty obligations that are more than double its cash. That alone would add another estimated $5 billion.
"Then Takata's suppliers, especially smaller businesses, will not get their money back and litigation costs will not be paid", he said.
There have been multiple issues with Takata's airbags but the main one involved airbag inflators that explode when the airbag is activated and blast shrapnel into the cabin.
Over 100 million vehicles, 70 million the USA alone, fitted with Takata airbags have been recalled since 2004, when reports of an issue first arose. That's what is needed to replace the millions of cars with recalled airbags. Its airbag inflators have been linked to at least 16 deaths and 180 injuries around the world because they can rupture and send metal fragments flying. Some, mainly from Europe, had dealt with US -based parts manufacturer Key Safety in the past, while others from Japan and elsewhere had little to no experience with it.
The challenges for the acquirer are manifold. It faces a talent exodus and auto industry distrust.
Takada said he intends to leave Takata management once the deal with Key Safety Systems is finalized. It is expected that Takata's PSAN-related operations will be run by a reorganized Takata following the transaction closing and eventually will be wound down.
"The proposed structure for the potential transaction is meant to minimise transaction risk and supply chain disruption concerns for Takata's (automaker) customers", Luo added.
Finally, consumers can use this opportunity to check to see if their own vehicles have any outstanding recalls here. It has sought help from rival suppliers including Sweden's Autoliv Inc ALV.N to produce replacement inflators.
Takada said he and top management would resign "when the timing of the restructuring is set".
But even if Takata will have to give up its brand, Miyao said that the worst-case scenario, where carmakers will have to halt production due to a disruption in the supply of air bags, will likely be avoided.
Takata was originally founded in 1933 as a textiles maker, and still produces approximately one third of all seatbelts used in all vehicles globally.
The Key Safety Systems portion of the deal, slated to close in early 2018, would create a conglomerate of 60,000 employees in 23 countries. "The No. 1 priority is the safety of the driving public, and I think everybody realizes that".
The first recorded explosion occurred in 2004, but was dismissed by the company as a freak accident. NHTSA opens probe. Takata says nothing to indicate inflator safety defects. The process of making all USA vehicles safe again could last until 2023.
Dorado's auto was found to have a defective Takata air bag that had been taken from another vehicle. Japanese air bag maker Takata Corp. on Monday filed for bankruptcy protection, as part of a restructuring scheme to restore its business batte.