Shares in Takata (TKTDY) jumped 16% on Friday after sources said the beleaguered airbag maker will plead guilty to criminal wrongdoing as part of a $1 billion settlement with U.S. authorities.
The settlement includes a $25 million criminal fine, $125 million in victim compensation and $850 million to compensate automakers who have suffered losses from massive recalls, the sources said.
“Takata has taken a step forward regarding the airbag issue with the U.S. Justice Department and this is being taken positively by the market,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management but he added that the firm’s woes were far from over.
Takata still faces a potential $10 billion in liabilities after recalling around 100 million defective airbags linked to at least 16 deaths worldwide, including 11 in the United States.
Shares in Takata surged 16% or by 150 yen, its daily limit, to give it a market value of about $770 million.
It is seeking a financial backer to help it restructure. But while some bidders want Takata to go through bankruptcy to wipe out most of its debt, creditors such as Honda Motor (HMC) are likely to resist any bailout that includes bankruptcy as they would have to shoulder significant losses, sources have said.
Sources have also said that bidders for Takata include rival inflator maker Daicel in partnership with U.S. buyout firm Bain Capital, U.S. air bag maker Key Safety Systems, which is expected to team up with U.S. private equity firm Carlyle Group LP, Swedish auto safety group Autoliv (ALV); and U.S. autoparts maker Flex-N-Gate.
