Takata shares soar 18 pc on bankruptcy plan denial
TOKYO: Takata shares surged 18 per cent on Wednesday after the embattled airbag maker denied it would enter into a potentially lengthy court-mediated bankruptcy restructuring.
The Tokyo-listed stock, which had lost more than half its value in the past week, jumped by its maximum daily limit to end at 519 yen, after the firm at the centre of the biggest-ever auto safety recall issued a statement on its turnaround plans.
The company said any courtoverseen process could affect its ability to supply its automaker customers with parts and “compromise” its obligations.
“That would create a huge burden on the company’s wide range of stakeholders,” it said in a statement Tuesday.
Takata was responding to reports last week that two rival suitors will propose a potentially drawn-out overhaul for the scandal-hit firm.
The news sent its shares into free fall. The company lost more than half its market value in a week before Wednesday’s rally.
“(The reports) caused confusion and are really regrettable,” Takata said.
“The company is not planning to choose the option of rehabilitating itself through legal means.”
Sweden’s Autoliv, the world’s leading airbag manufacturer, and a consortium led by US autoparts maker Key Safety Systems, are reportedly vying for control of Takata.
The recall of more than 100 million airbags, which has affected almost every major automaker, is linked to a defect that can cause the safety devices to inflate with excessive force, sending metal shrapnel from the inflator canister hurtling towards drivers and passengers.
The defect has been linked to at least 16 deaths and scores of injuries worldwide.
This month, Takata agreed to plead guilty to fraud and pay $1 billion to settle the exploding airbag scandal with US regulators.