Takata Corp shares yesterday surged 18 percent 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 of its value in the past week, jumped by its maximum daily limit to end at ￥519, after the firm at the center of the biggest-ever auto safety recall issued a statement on its turnaround plans.
The company said any court-overseen process could affect its ability to supply its automaker customers with parts and “compromise” its obligations.
Photo: AFP
“That would create a huge burden on the company’s wide range of stakeholders,” it said on Tuesday in a statement.
Takata was responding to reports last week that two rival suitors would propose a potentially drawn-out overhaul for the scandal-hit firm. The news sent its shares into free fall.
“[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 Co, the world’s leading airbag manufacturer, and a consortium led by US autoparts maker Key Safety Systems Co, 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 toward 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 US$1 billion to settle the exploding airbag scandal with US regulators.
The US has also indicted three former Takata employees in the case, bringing the first criminal charges in the scandal.
The individuals, who left the company in 2015, were charged with fraud for hiding the flaws in the airbags.
Under the terms of Takata’s US deal, it is to pay a US$25 million fine, establish a US$125 million fund to compensate victims and pay US$850 million in restitution to affected automakers.
A Texas teenager died in March last year after a Takata airbag in her Honda Civic ruptured in a crash, sending a metal fragment into the side of her neck, according to media reports.
A pregnant Malaysian woman suffered a similar fate in 2014.
US regulators have said the problem is more dangerous in southern parts of the US and places with warmer and more humid climates.
In November 2015, the US National Highway Traffic Safety Administration imposed a record US$200 million civil fine against Takata for providing inadequate and inaccurate information to regulators about the defect.
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