Embattled airbag maker Takata Corp on Monday filed for bankruptcy protection in Japan and said it would seek US$1.588 billion in financial aid from US-based auto parts supplier Key Safety Systems (KSS).

The KSS deal would help it deal with the fallout from its defective airbag inflators at the centre of the global auto industry's biggest ever recall, the two companies said in a
joint statement.

The filing at the Tokyo District Court followed a Chapter 11
bankruptcy protection filing in the United States.

As part of the bankruptcy protection plans, KSS would
acquire all of Takata's assets barring certain assets and
operations related to the airbag inflators involved in the
global recall in the planned deal worth US$1.59 billion.

Takata would keep operations of its affected inflators for
now to continue supplying recall replacement parts, and would eventually wind down those operations, the two companies said in a statement.

"KSS is the ideal sponsor as we address the costs related to
airbag inflator recalls, and an optimal partner to the company's customers, suppliers and employees," Takata CEO Shigehisa Takada said in a statement.

Jason Luo, president and CEO of KSS, said in a statement the "underlying strength" of Takata's business had not diminished despite the airbag recall.

The Tokyo Stock Exchange said shares of Takata would be
delisted on July 27 after it filed for bankruptcy protection.

The stock will be suspended for all of Monday, after closing
at 160 yen on Friday.

--Reuters