Feeds

Don't touch Sony, Panasonic's junk, says credit agency

Pana may grope its way out of misery, though

Designing a Defense for Mobile Applications

Panasonic has a better chance than Sony of surviving the global disinterest in new consumer electronics, credit rating agency Fitch said today.

Fitch downgraded the two debt-saddled firms to junk status: Panasonic's credit rating was pushed down two ranks to double-B, and Sony was nudged down three to double-B-minus. Panasonic is still ahead of Sony, meaning Fitch reckons it has a better chance of being able to pay its debts that Sony does.

"[Panasonic] has the advantage of a relatively stable consumer appliance business that is still generating positive margins," Matt Jamieson, Fitch's head of Asia-Pacific, told Reuters. "Most of [Sony's] electronic businesses are loss making, they appear to be overstretched."

When a company reaches junk level, it will find it almost impossible to raise money for its business, which can push it over the edge.

All of Japan's major electronic firms are suffering, as folks around the world put off buying new tellies and other big ticket items, while the strong yen eats into their profits and competitors in South Korea get ahead of them.

Sharp has already bagged a 30bn yen (£236m) bailout from banks, while Panasonic has persuaded lenders to part with 600bn yen (£4.7bn).

Most of the firms are also engaged in restructuring: they're trying to find pieces of their business that can survive the downturn and concentrate on that. Panasonic is focussing on appliances, solar panels, lithium batteries and automotive components, while Sony is staying with gadgets, cameras and gaming.

Both companies have also found a way to ride out the year; Panasonic with its bank bailout, and Sony with a full-year profit of $1.63bn after selling its chemicals business to a Japanese state bank and raising $1.9bn through convertible bonds it managed to get out before the ratings downgrade. ®

The smart choice: opportunity from uncertainty

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.