Takata Corp. hired restructuring bankers to seek a cash infusion and negotiate with auto makers on mushrooming costs from rupture-prone air bags linked to 11 deaths and more than 100 injuries globally.

Takata tapped Lazard Ltd. to help craft a restructuring plan for dealing with swelling liabilities from the safety crisis expected to total billions of dollars, said people familiar with the matter. The Japanese supplier hopes to find a financial investor or automotive company for additional cash and reach a deal with car makers on sharing costs for recalls nearing 70 million air bags in the U.S. alone.

A Takata steering committee of business, financial and legal experts in Japan retained Lazard within the past month, and work soliciting an investor and conversations with auto makers remain in early stages, the people said. Takata doesn't yet have a sense on when it hopes to complete a restructuring plan, and no immediate liability payments loom, they said.

But the company, posting losses and with some $523 million in cash, can't cover the ultimate costs stemming from the defective air bags, the people said. The air bags use an ammonium-nitrate propellant that can degrade amid prolonged exposure to moisture, leading to explosions that spray shrapnel in vehicle cabins.

Takata's restructuring poses a conundrum for auto makers not eager to shoulder massive bills for defective air bags the supplier manufactured. At the same time, Takata supplies new air bags, seat belts and other parts needed to keep automotive production lines humming, so car makers have an interest in keeping the company in business.

Only a handful of other companies supply air bags, and auto makers prefer competition among parts makers. Still, car makers are amassing claims against Takata by purchasing replacement air bags for recalls and are bound to seek repayment. Auto makers are expected to have significant influence over greenlighting any new Takata investor, the people said.

For Takata, a restructuring deal is expected to include new company measures for ensuring quality and undetermined corporate governance changes, the people said. Takata also plans to continue working to pinpoint a root cause for air-bag ruptures to better prevent them, the people said. U.S. regulators earlier this month said the age of air-bag inflaters, along with longtime exposure to moisture and fluctuating high temperatures form the root causes.

Takata for now aims to raise money and appease auto makers without having to resort to bankruptcy court, the people said. But the Japanese supplier's advisers haven't ruled out a bankruptcy filing should efforts to restructure outside of court fail, they said. Companies facing massive liabilities sometimes seek bankruptcy protection to form payment plans. In addition to Lazard's bankers, Weil Gotshal & Manges LLP restructuring lawyers are working with the Takata steering committee, the people said, a development The Wall Street Journal reported in March. Takata's board created the five-member steering committee in February to develop the company's restructuring plan.

The U.S. National Highway Traffic Safety Administration earlier this month ordered up to an additional 40 million Takata air bags recalled, on top of 28.8 million already part of such safety campaigns. For Lazard, a main challenge in seeking an investor and negotiating with auto makers will be quantifying Takata's liabilities, which depends on how many consumers get recalled vehicles repaired and the outcome of litigation and government probes. The recent U.S. regulatory action could lead to another 55 million Takata air bags being recalled globally, and more than $6 billion in additional costs, according to an estimate from Jefferies Group LLC analyst Takaki Nakanishi.

In addition to recall costs, Takata faces widespread wrongful death, personal injury and economic-loss litigation, and a potential hefty financial penalty depending on the outcome of a U.S. Justice Department criminal probe. Takata in November admitted to failing to alert U.S. regulators to defective air bags in a timely manner as legally required and received a $70 million fine that could jump to $200 million for additional lapses. Takata has said it is cooperating with government officials.

The Japanese supplier also has acknowledged manipulating testing reports, straining relations with auto makers, including Honda Motor Co., its largest customer. Honda and other auto makers have said they would no longer use front Takata air-bag inflaters. Takata, under the terms of U.S. regulatory settlement, must eventually stop producing inflaters with ammonium nitrate that lack a drying agent and eventually recall all devices using the chemical unless they're proven safe.

Takata posted a $121 million loss for the year ended in March. The company recorded more than $180 million in special losses for recalls and settling legal claims from air-bag victims. The company's shares are off more than 50% so far this year but rose earlier this month when Takata predicted future profits.

A cash investment for Takata could come in the form of debt or equity, the people said. For an investor, Takata will likely need to quantify expected liabilities stemming from defective air bags, and assurances that auto makers intend to keep doing business with the Japanese supplier. An equity investor could bet that Takata eventually weathers its safety crisis and continues to command significant automotive market share. A lender could hope to charge an attractive interest rate with assurances of being among the first repaid should Takata resort to a bankruptcy filing.

Write to Mike Spector at mike.spector@wsj.com

(END) Dow Jones Newswires

May 25, 2016 15:45 ET (19:45 GMT)