Takata stock trading suspended after reported bankruptcy filing plan

TOKYO -- Trading in shares of Japan's Takata Corp. was suspended on Thursday after a newspaper report that the embattled supplier was considering filing for bankruptcy protection, selling all operations to a newly created company.

The Nikkei business daily said the plan would call for U.S.-based Key Safety Systems, a unit of China's Ningbo Joyson Electronic Corp., to sponsor the turnaround plan, spending nearly 200 billion yen ($1.8 billion) to create a company that would buy Takata's operations.

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 and Bain Capital 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, 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.

Takata's steering committee and potential bidders have been negotiating for months, with talks dragging due to differences over issues including price and how to handle risks for suppliers, two sources with knowledge of the issue have told Reuters.

A spokeswoman for KSS declined to comment, while Hong Kong-based representatives for Bain could not immediately be reached.

Discussions that involve the automaker's clients, suitors and bankers are likely to run on until at least the end of May before a decision is reached, sources have said.

In January, Takata agreed to plead guilty to criminal wrongdoing in the United States and to pay $1 billion to resolve a U.S. federal investigation into its inflators.

A federal judge in Detroit this month said he plans to name former Federal Bureau of Investigation director Robert Mueller to oversee nearly $1 billion in Takata restitution funds, as part of a U.S. Justice Department settlement.