Japanese firms Sony and Panasonic have had their credit ratings cut to Junk status for the first time.
Both firms have seen demand for their products fall while their core TV businesses dwindle – the Japanese have suffered at the hands of both Apple and Samsung, as demand for Apple’s iPhone, and Samsung’s ever growing Galaxy range rises.
The cut in ratings means that for both firms, borrowing will now cost far more than before, and that their debt was no longer considered safe and investment-grade. Fitch said on Sony’s cut, “meaningful recovery will be slow, given the company’s loss of technology leadership in key products, high competition, weak economic conditions in developed markets and the strong yen”.
Fellow Electronics maker, Sharp also suffered a similar cut earlier this month at the hands of both Fitch and Standard and Poor’s, as it too was relegated to Junk status.
So where did it go so wrong? The BBC’s James McQuivey looks at this in more detail;
The Saga continues, and McQuivey has highlighted Sony’s transition to Digital as a falling point, just as detailed in a previous post;
More on this scintillating story as it unfolds.