Takata's remaining bidders to seek court-led turnaround in Japan

Takata Corp's two remaining bidders plan to propose a court-mediated turnaround for the Japanese operations of the troubled auto parts maker, the Nikkei business daily reported on Thursday.

The Tokyo Stock Exchange suspended trading in Takata shares after the report. A spokesman for Takata declined to comment on the report.

Takata is in the process of selecting a financial backer as it faces billions of dollars in costs to replace tens of millions of potentially defective air bag inflators that have been linked to at least 16 deaths globally.

Potential bidders, so far, have presented restructuring plans that require the company to file for bankruptcy protection for its US unit, sources have previously told Reuters. Some of them, including US buyout firm KKR & Co , have since dropped out of the process.

Takata has been considering the option, but is said to prefer a private, out-of-court process for its core Japanese operations.

The Nikkei said the two remaining bidders, Swedish air bag maker Autoliv Inc and US parts supplier Key Safety Systems, plan to present their proposals as early as this week.

Japan's Daicel Corp and US buyout firm Bain Capital, which had previously teamed up for a separate bid, have joined Key Safety Systems, the Nikkei said.

The paper added that even if Takata's external steering committee submits a plan for court-led rehabilitation, its board could still reject the idea.