* Expects net loss Y64.0 bln in year through March
* Sets aside Y97 bln for $1 bln U.S. fine
* Seeks financial rescue as air bag recall fallout continues
(Adds company comment, details on Takata air bag issues)
By Naomi Tajitsu
TOKYO, Feb 10 Takata Corp on Friday
said it expects to post a full-year net loss for the third
consecutive year as the Japanese air bag maker anticipates costs
related to the biggest automotive product recall in history will
eat away at its bottom line.
Takata forecast a loss of 64.0 billion yen ($563 million)
for the year through March rather than its previous estimate of
20.0 billion yen in profit. It booked a loss of 21.1 billion yen
Takata, facing billions of dollars in recall-related costs,
has been looking for a sponsor to lead its restructuring. People
familiar with the matter have told Reuters that Takata has
selected Key Safety Systems.
The costs behind the downgrade include a provision for 96.93
billion yen as part of a $1 billion settlement with the United
States Justice Department, plus a 3.5 billion yen special loss
for recall-related costs in the business year's final quarter.
"In January we came to an agreement with the U.S. Department
of Justice which includes a fine, and this has led to an
extraordinary loss. As a result, we have lowered our full-year
forecast," Takata said in a statement.
The auto parts maker is set to plead guilty on Feb. 27 in
federal court in Detroit to a single felony count of wire fraud
to resolve a Justice Department investigation into ruptures of
its air bag inflators that have been linked to at least 16
deaths worldwide, mainly in the United States.
The company has agreed to withdraw about 100 million
inflators globally and has been struggling to supply
Mounting costs have pummelled Takata's profits, while its
share price has dropped 85 percent since 2014.
If Takata is found solely responsible for the defective
inflators, it could face a bill of more than $10 billion for
recalls announced so far, based on calculations from industry
experts and automakers including General Motors Co.
The potential liability would dwarf Takata's cash reserves
of around 72.4 billion yen as at the end of September. So far,
automakers have paid most of the recall costs while they discuss
with Takata how to divide responsibility.
Takata also on Friday reported operating profit for the
October-December quarter of 10.8 billion yen, slightly lower
than the 12.6 billion yen of the same period a year prior.
($1 = 113.7300 yen)
(Reporting by Naomi Tajitsu; Editing by Christopher Cushing)