Moody's cuts short-term rating on Sharp's debt to junk status
TOKYO, Sept 5
TOKYO, Sept 5 (Reuters) - Japan's Sharp Corp on Wednesday had its short-term debt rating cut to junk by Moody's Investors Service, further curtailing the struggling TV maker's access to credit as it looks for money to pay its debts.
The one-notch downgrade to "Not Prime" follows a cut in Sharp's long-term debt rating to junk status on Friday by Standard & Poor's. With limited ability to borrow from credit markets, the maker of Aquos television will have to rely on the backing of its main banks, Mizuho Financial Group Inc and Mitsubishi UFJ Financial Group Inc.
"Sharp's liquidity profile is under pressure due to the company's high level of short-term debt and weak operating performance," Moody's said in a report.
Sharp, which has as much as 360 billion yen ($4.6 billion) of short-term commercial paper to repay, is also seeking investment from Taiwanese partner Hon Hai Precision Industry Co Ltd. Hon Hai is negotiating to buy a 9.9 percent stake in the Japanese company.
Hon Hai's chairman, Terry Gou, in interviews with local media in Taiwan, has said Sharp will have to relinquish some management control in return for that investment. ($1 = 78.3900 Japanese yen) (Reporting by Tim Kelly and Debanjali Ghosh in Banaglore; Editing by Ryan Woo)