S&P downgrades Sanyo to junk status

Standard and Poor's has cut its long-term credit rating on Sanyo to junk investment status, expressing concern about the future of the Japanese electronics maker which is sinking deeper into loss. SP downgraded Sanyo Electric's long-term corporate credit rating by two notches to BB from BBB-minus, meaning its bonds are considered to have speculative elements and do not carry good safeguards. The agency also lowered Sanyo Electric's long-term senior unsecured debt by one notch to BB-plus from BBB-minus. Both ratings remain on review for possible further downgrade.

Sanyo said Friday it plunged to an interim first-half net loss of 142.52 billion yen (1.20 billion dollars), hit by a price war in televisions, DVD players and other markets. Sanyo also said it may restructure its television division, boost alliances with other firms in home appliance manufacturing and spin off its semi-conductor division as part of a revised business plan.

Sanyo began in 1947 by making bicycle lamps in Osaka and now produces everything from TV sets, cameras and MP3 players to washing machines and microwaves as well as industrial batteries and computer chips.

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