Sharp: note lowered by S & P to CCC +, because of the worsening … – Romandie.com

Sharp: note lowered by S & amp; P to CCC +, due to the worsening of the accounts

 Tokyo (awp / afp) – The rating agency Standard & amp; Poor’s downgraded Wednesday in CCC + (B- against) the long-term rating of Japanese electronics group Sharp, which sinks another notch to junk status due to a further deterioration of its accounts.

S & amp; P had raised the appreciation of the liquid crystal displays of pioneer in July, once officially recorded a bailout by banks Mizuho and Mitsubishi UFJ, but competition on LCD screens and subsequent lower prices prevented the group to meet . the expectations of the Agency

This situation “has significantly impacted the ability of the company to generate profits,” wrote S & amp; P in a statement

“Sharp. had difficulties in regulating its production, while shorten product cycles in the LCD display industry and reduces the visibility of orders and sales volumes to its main customers, Chinese smartphone manufacturers, “detailed the Agency

“Therefore, profitability continued to deteriorate” and S & amp;. P believes that “the competitiveness of the LCD pillar activity for smartphones and tablets continues to weaken due to a loss Sharp substantial capacity to generate funds for development and investment, “a vicious circle.

Sharp is in discussions with several companies to review thoroughly the functioning of its LCD business.

“At this stage, it is difficult to accurately predict how the company will reorganize this activity, but whatever the future shape of the restructuring, there will be massive losses that will in turn erode again much the group equity “warns the agency.

Since the bailout by banks has not produced the expected results, the funders will more closely monitor further progress in . restructuring, she adds

Even if Sharp advance (possibly via a partial sale of its LCD business), S & amp; P believes that “now runs the increasing risk of having to restructure its debt existing as it continues to face a huge debt, has insufficient equity and is likely to suffer enormous losses for the year 2015 “

As a result, S & amp;. P evaluates 50 % probability that Sharp has difficulty in meeting its financial commitments, and feared a “selective default”.

“The financial commitments of Sharp are unsustainable in the long term, taking into account the vulnerability of its flow Cash (…) and the high volatility of its results for the LCD business. “

In addition, Sharp other activities, although relatively competitive, suffer from being too small

S & amp;. P adds that “the outlook is negative” and threatened to lower the rating several notches even in case of default proved or qualified as such according to the financial criteria of the agency <. /> p>

“Conversely, we could revise with stable outlook if Sharp showed rapid progress in drastic restructuring measures of its LCD business but, at this stage, this scenario is unlikely,” said S & amp; P.

kap / ANB / php

(AWP / 04.11.2015 11:19)

(AWP / 04.11.2015 11:19) – >