Business

Takata shares hit by bankruptcy rumours

A Takata billboard Image copyright Reuters
Image caption The firm has been hit by a huge recall over the past years

Takata shares have fallen almost 12% after a report that potential bidders are considering bankruptcy proceedings for the company to mitigate their liability following the firm's airbag scandal.

Takata has been hit by a huge recall of faulty and potentially deadly airbags used worldwide by carmakers.

It has been linked to 11 deaths and more than 100 injuries.

The shares dropped following a report from Bloomberg citing unnamed bidders.

Reports emerged last week that Takata was looking for private equity groups and other car part makers as investors to help it with its financial situation.

However, on Tuesday, Bloomberg reported that several bidders were considering a push for bankruptcy protection instead as it might mean lower repayments to debt holders.

The move would mean the company being put under administration so it can be restructured with the help of new investors.

Through this process, future investors can be relieved of some of the company's debts and obligations.

Takata has paid out $70m (£48m) in fines from US regulators so far over the faulty airbags.

In May, the company reported a net loss of 13.1bn yen ($128.7m, £99m) for its financial year ending in March.

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