Crisis-hit Takata's share price has come under renewed pressure following rumours that Key Safety Systems (KSS) had been selected to lead its turnaround, something that could make a more drastic restructuring likely.
The Nikkei news agency has reported automakers would support the pick of KSS on condition that Takata pursue a court-led turnaround in both Japan and the US. That could wipe out shareholders's equity, Nikkei said.
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The steering committee leading the selection process for restructuring had told Takata's automaker clients of its decision, according to Reuters.
Reuters also reported that Takata denied that it had selected KSS as its sponsor or that a court-led restructuring is now imminent.
KSS has favoured a court-led process to cap exposure to Takata's existing liabilities, sources have reportedly told Reuters. It said those liabilities are estimated by some analysts to be as high as $10 billion for recall costs alone.
However, such an option could deal a huge blow to shareholders. Takata has said that a court-led restructuring could disrupt its supply-chain and affect its ability to pay suppliers.
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By GlobalDataKSS is owned by Chinese components supplier Ningbo Joyson Electronic Corp., which acquired the firm for $920m a year ago.
