Troubled air bag maker Takata plummets by more 50%

TOKYO — Takata shares suffered another hair- raising dive Thursday, plummeting by more than 50% on fears the troubled air bag maker is headed for bankruptcy and plans to sell its assets to a US company.

The Tokyo- based company at the center of the global auto industry’s biggest ever safety recall has tumbled for four straight days and its stock is now worth less than a quarter of its value just a week ago.

The shares dropped by their maximum daily loss limit on the Tokyo Stock Exchange to ¥ 115 ($ 1.10), falling by more than 50% from its Wednesday close.

“The shares are going to keep falling because the only buyers are day traders hoping to lock in gains from fluctuations in the price,” Hiroaki Hiwata, a strategist at Toyo Securities, told AFP.

The huge losses stem from a report last week by Japan’s Nikkei business daily which said the company, with liabilities exceeding ¥ 1 trillion yen ($ 9 billion), would make a formal decision about the bankruptcy filing at a board meeting this month.

Some other media have made similar reports, saying Takata’s automaker clients were supporting the bankruptcy plan.

On Wednesday, Jiji Press reported the air bag maker will file for bankruptcy protection on Monday, while other media suggested it could come as early as this week.

In response, Takata issued a brief statement Thursday that said “no decision of any kind has been made.”

Takata shares were suspended from trading on Friday pending a response to the original Nikkei story and other reports.

Later that day Takata said that no decision had been made but “all options” were on the table.

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

The board of Takata’s USbased unit TK Holdings is expected to approve a filing for Chapter 11 bankruptcy there this month, it added.

Nearly 100 million cars, including about 70 million in the United States, were subject to the air bag recall, the largest in auto history, over the defective Takata air bags.

The defective safety devices have been blamed for at least 16 deaths and scores of injuries globally.

Takata has already agreed to pay a billion- dollar fine to settle lawsuits in the United States over its air bags.

The scandal has involved almost every major global automaker, including top client Honda, which has already written down huge costs linked to the faulty air bags.

The new company created under Key Safety would reportedly buy Takata’s operations and continue supplying air bags, seat belts and other products.

The downsized Takata would remain responsible for recall- related liabilities, the

Nikkei said. —