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Shares in Takata sank on Wednesday amid reports the troubled airbag maker might let its customers decide on how to restructure the company as it attempts to survive a crisis over its exploding airbags.

The Japanese company may have little choice other than to let carmakers decide on its fate, which could involve filing for bankruptcy through court as part of its restructuring process, Bloomberg said citing an unnamed source familiar with the matter.

The carmakers, which have had to shell out billions of dollars in repair costs related to the faulty airbag safety scandal, have already been involved in discussions related to possible restructuring options.

Chinese-owned Key Safety Systems, the leading bidder for Takata, is also believed to be in favour of a court-led restructuring, according to people close to the talks.

A Takata spokesperson told the Financial Times the company is still against a bankruptcy filing and that their stance has not changed.

Shares were down 7.2 per cent in afternoon trade in Tokyo, versus a 1.8 per cent drop for the Topix benchmark. They had been off by as much as 10.5 per cent.

Takata has previously said a court-led bankruptcy would disrupt the supply of its parts to customers. However the company’s deteriorating financial position has meant the likelihood of its fate being decided by carmarkers has risen.

Last month, it warned of a third straight year of losses and its financial outlook deteriorated sharply after agreeing to pay a $1bn criminal penalty in the US relating to its airbag safety scandal.

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