Toshiba shares fall 9% after S&P downgrade warning

Tokyo: S&P Global Inc (SPGI.N) said in a report yesterday it could cut its rating of Toshiba Corp (6502.T) credit by several notches should the Japanese firm receive financial support that includes debt restructuring, sending Toshiba stock down 9 percent.
S&P rates Toshiba credit as junk, at CCC+, following downgrades in December and January, after the conglomerate flagged a multi-billion dollar writedown in its nuclear power business. The credit-rating firm expects banks to help Toshiba, including by extending deadlines for loan repayments.
Any further downgrade would prompt banks to charge Toshiba even higher rates for credit, at a time when the conglomerate is dealing with the crippling writedown while still working to recover from a financial scandal in 2015.
S&P's Global analyst Hiroki Shibata yesterday said the credit-rating firm was closely watching Toshiba's likely sale of its chip business.
Toshiba initially planned to sell less than 20 percent of its NAND flash memory unit, but is now considering selling most or all the business some time after March 31. The chip business is cyclical and capital intensive but currently generates stable profit, so its sale could essentially be negative for Toshiba, Shibata said.