Takata Tumbles 69% as Limits Removed After Bankruptcy FilingBy
Air-bag maker filed for bankruptcy protection in U.S., Japan
Takata will be delisted from the Tokyo exchange on July 27
Takata Corp. shares tumbled as much as 69 percent to a record low as the Tokyo Stock Exchange removed daily limits on the stock’s price declines following the company’s bankruptcy protection filings in Japan and the U.S.
The stock traded at 35 yen as of 11:21 a.m. in Tokyo trading. Shares of the air-bag maker have slumped 91 percent since June 16, when they were suspended after Bloomberg and other media reported the company was preparing to seek protection from creditors.
Takata filed for creditor protection in the U.S. on June 25. It received U.S. court approval on Tuesday of so-called first-day requests, which included interim permission to pay vendors it deemed critical, as well as employee salaries. Key Safety Systems Inc. agreed to buy the company for $1.6 billion.
Takata’s bankruptcy, the biggest by a Japanese manufacturer in the postwar period, signals the end for an 84-year-old company that began as a textile maker and supplied parachutes to the Imperial Japanese Army during World War II. It conducted an initial public offering in 2006, and the shares were worth 5,160 yen each at their peak. The Tokyo exchange will delist the company on July 27.
The company buckled under the weight of more than $10 billion in liabilities tied to the recalls of faulty air bags that can explode with too much force, spraying metal shards at vehicle occupants. The devices have been linked to at least 17 deaths worldwide. Claims against Takata listed in its filings include individuals who have brought class-action lawsuits and automakers seeking reimbursement for recall costs.