Shares in Japan's Takata suspended after report on bankruptcy plan

Thu Apr 27, 2017 1:06am EDT
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By Naomi Tajitsu and Chang-Ran Kim

TOKYO (Reuters) - Trading in Takata Corp shares was suspended on Thursday after a report that the Japanese airbag maker at the heart of the car industry's biggest-ever recall is considering a bankruptcy plan that will create a new company and ringfence its liabilities.

The Nikkei business daily reported Chinese-owned car parts maker Key Safety Systems (KSS), the company's preferred bidder, would sponsor the turnaround plan by injecting 200 billion yen ($1.8 billion) and helping create a new operating company.

That money would be transferred to Takata to help settle claims linked to faulty air bags that have been blamed for at least 16 deaths worldwide.

Agreement on a restructuring deal, eight years after the first death, would enable Takata to draw a line under the crisis and help it continue supplying replacement air bag inflators, as well as selling seat belts and other vehicle components.

In a statement, Takata acknowledged that its steering committee had endorsed KSS as a sponsor candidate, but said it had not reached any decision on its restructuring.

Reuters reported earlier this month that a group including KSS, a U.S. unit of China's Ningbo Joyson Electronic Corp, and Bain Capital LLC was Takata's preferred bidder, and would offer around 200 billion yen.

Takata has long insisted it prefers a privately arranged restructuring, but people with knowledge of the situation have told Reuters that the company has come under increasing pressure from potential bidders and automaker clients to agree to a court-ordered process, which would provide more transparency.

Automakers including Honda Motor Co Ltd, which have been paying for recalls for almost a decade, have insisted on the court route - even if that would wipe out shareholder value, hitting the founding Takada family, with a 60 percent stake.   Continued...

FILE PHOTO -  A logo of Takata Corp is seen with its display as people are reflected in a window at a showroom for vehicles in Tokyo, November 6, 2015. REUTERS/Toru Hanai/File Photo