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22/11/2012 10:49:30 AM
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Publish Date22/11/2012 10:49:30 AM
Fitch rating agency downgraded on Thursday the credit rating of Sony Corp and Panasonic Corp to “junk” due to weakness in their businesses.
Sony’s credit rating was cut three levels to BB- with a negative outlook, while Panasonic’s credit rating was cut two levels to BB also with a negative outlook.
Fitch says that Japanese electronics makers like Sony, Panasonic and Sharp are suffering from a strong yen and the weak economic conditions in Japan and abroad.
Weak demand for their products is also a result of fierce competition from Apple and Samsung and weak cash generation from its operations.
“Meaningful recovery will be slow given the company’s loss of technology leadership in key products”, said Fitch and Sony.
Shares of Sony, Panasonic and Sharp are seen this year trading at their lowest levels in more than 30 years in Tokyo.
That increases speculations that the companies will fail to survive amid the mounting losses.
Sony shares fell 0.3% in Frankfurt today while Panasonic shares were down 0.6% amid low volumes.
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