TOKYO Shares in Takata Corp, the airbag maker at the centre of the world's largest automotive recall, jumped by a fifth on Friday, surging for a second straight day, on news that criminal charges with the U.S Department of Justice may be settled next month.
Takata air bag inflators have been linked to at least 16 deaths worldwide, including 11 in the United States. The inflators can explode with excessive force and send metal shrapnel flying inside a vehicle.
A source briefed on the talks told Reuters on Wednesday that the charges could be settled before the Obama administration leaves office next month.
That followed a report in the Wall Street Journal that Takata is expected to pay a financial penalty in a range of high hundreds of millions of dollars to at most about $1 billion (813.5 million pounds).
Since then the stock has surged 41 percent, giving the beleaguered airbag maker a market value of $610 million.
"Nothing has been resolved for Takata yet, but reaching a settlement with the U.S. would help the company take the first step forward," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management, adding that investors appeared to be covering short positions.
Takata still faces potentially billions of dollars in costs from recalls - about 100 million of its inflators have been ordered to be withdrawn globally - as well as lawsuits.
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 Co are likely to resist any bailout that includes bankruptcy as they would have to shoulder significant losses, sources have said.
(Reporting by Ayai Tomisawa and Edwina Gibbs; Editing by Muralikumar Anantharaman)