Takata shares suspended on bankruptcy filing report

Takata shares suspended on bankruptcy filing report

Trading in scandal-hit airbag maker Takata was suspended Friday in response to a report that it is set to file for bankruptcy protection as early as this month and sell its assets to a US company.

Takata, at the centre of the global auto industry’s biggest-ever safety recall, will make a formal decision about the bankruptcy filing at its board meeting this month, the leading Nikkei business daily reported, without citing sources.

American autoparts maker Key Safety Systems, owned by China’s Ningbo Joyson Electronic, will take over the firm’s operations, the report said.

The board of Takata’s US-based unit TK Holdings is expected to approve a filing for Chapter 11 there this month, the Nikkei said.

Trading in Takata was suspended on the Tokyo Stock Exchange pending a response to the reports. There was no official statement from Takata more than two hours after markets closed and a company spokeswoman declined comment.

Nearly 100 million cars, including about 70 million in the United States, were subject to the airbag recall, the largest in auto history, over the defective Takata airbags blamed for 11 deaths in the US alone.

Last month, four automakers including Toyota and BMW agreed to pay $553 million to settle a US lawsuit over the airbags.

The lawsuit filed in late February claimed the automakers were aware of the dangerous defects and used the airbags in their vehicles anyway. Nearly 16 million cars were involved.

Takata pleaded guilty to fraud in February and agreed to pay a $1 billion penalty to settle the issue with US regulators.

The report on Friday said a new company created under Key Safety will purchase Takata operations for about 180 billion yen ($1.6 billion) and continue supplying air bags, seat belts and other products.

The downsized Takata will remain responsible for recall-related liabilities, it said.