Takata shares dropped nearly 20% yesterday after a media report said the embattled Japanese airbag maker was considering filing for bankruptcy protection and then rolling its key businesses into a new company.
The stock price fell 19.53% to ¥412 ($3.70) — the daily limit loss of ¥100— after the Tokyo Stock Exchange lifted a trading suspension in the afternoon.
Trading in Takata’s shares was temporarily halted yesterday after Japan’s Nikkei business daily reported on a scheme to split the company.
Takata, at the centre of the biggest-ever auto safety recall, acknowledged that discussions were under way, but said no final decisions have been made.
It declined to comment on details of the report in the Nikkei.
Takata has already agreed to pay a billion-dollar fine to settle lawsuits in the United States over its defective airbags, which have been linked to at least 16 deaths and scores of injuries globally.
Yesterday, the Nikkei said Takata was considering filing for bankruptcy protection and then selling its core operations, including airbags, seat belts and child safety seats, to a new company created for the purpose of acquiring those divisions.
An external committee charged with formulating a plan for Takata’s rescue in February recommended Key Safety Systems (KSS), a US subsidiary of China’s Ningbo Joyson Electronic, as its turnaround sponsor, the Nikkei said.
“It’s true there are talks under way about how to rehabilitate the company, primarily among automakers and KSS, but we haven’t received a report from the external committee yet,” the company said in a statement yesterday.
“We do not have any decision or relevant facts to disclose.”
Key Safety would put up nearly ¥200bn ($1.79bn) to create the new company that would purchase Takata operations, the Nikkei said. That would let the stripped-down auto parts maker use the proceeds of the sale to repay creditors, including major automakers, for expenses linked to the massive recall of its airbags, the paper said without citing sources. Takata would eventually be liquidated, it added.
Top creditors of Takata, including Honda and Toyota, broadly agree on the plan, the Nikkei said.
Japanese automakers would agree not to pursue Key Safety or its future subsidiary for future recall costs, the article said.
The recall of more than 100mn airbags has affected almost every major automaker.
The logo of Takata Corp is seen at a showroom for vehicles in Tokyo. Shares in the company fell 19.53% to u00a5412 ($3.70) after the Tokyo Stock Exchange lifted a trading suspension in the afternoon.
