Trading in Takata's shares was temporarily halted Thursday after a media report said the embattled Japanese airbag maker was considering filing for bankruptcy protection and then rolling its key businesses into a new company.
Takata, at the centre of the biggest-ever auto safety recall, acknowledged that discussions were under way, but said no final decisions have been made. It declined to comment on details of the report in Japan's Nikkei business daily.
The Tokyo Stock Exchange lifted a trading suspension in the afternoon, but the firm's stock went untraded as sell orders swamped buy orders.
However, they are set to fall as much as 20 percent to 412 yen ($3.70) once they start trading again.
Takata has already agreed to pay a billion-dollar fine to settle lawsuits in the United States over its defective airbags, which have been linked to at least 16 deaths and scores of injuries globally.
On Thursday, the Nikkei said Takata was considering filing for bankruptcy protection and then selling its core operations, including air bags, seat belts and child safety seats, to new company created for the purpose of acquiring those divisions.
An external committee charged with formulating a plan for Takata's rescue in February recommended Key Safety Systems (KSS), a US subsidiary of China's Ningbo Joyson Electronic, as its turnaround sponsor, the Nikkei said.
"It's true there are talks under way about how to rehabilitate the company, primarily among automakers and KSS, but we haven't received a report from the external committee yet," the company said in a statement Thursday.
"We do not have any decision or relevant facts to disclose."
Key Safety would put up nearly 200 billion yen ($1.79 billion) to create the new company that would purchase Takata operations, the Nikkei said.
That would let the stripped-down auto parts maker use the proceeds of the sale to repay creditors, including major automakers, for expenses linked to the massive recall of its airbags, the paper said without citing sources.
Takata would eventually be liquidated, it added.
Takata's top creditors, including Honda and Toyota, broadly agree on the plan, the story said.
Japanese automakers would agree not to pursue Key Safety or its future subsidiary for future recall costs, the story said.
The recall of more than 100 million airbags has affected almost every major automaker.