Fitch, a credit rating agency, has reduced Sony to Junk status, and another prominent Japanese company Panasonic has met the same fate.
Not a surprise, however, with both these companies posting mega losses with Panasonic posting a mammoth $10 billion loss. I am currently using a Panasonic TV, and it would be disturbing to see Panasonic ceasing TV production. Come on Japanese government, bail them out already!
“This wasn’t an easy decision. But their reputations have been hit so much that it’ll take a long while to crawl back.” said Matt Jamieson, Seoul-based head of corporate research.
Financial Times also reports that other credit agencies have given their opinion on this whole fiasco with some people saying Sony would find it difficult to bounce back due to the high Yen and losing prominence in the technology sector.
“I don’t think the banks will push either of these companies to the wall. But they do need to convince people that tough restructuring moves will be done in good time, while minimising unnecessary damage to healthy businesses,” Damian Thong, an equity analyst at Macquarie Securities in Tokyo, said.
These companies are getting mauled by Korean companies who produce things for a low cost and push it to market earlier. Samsung is one of the biggest companies of this decade and is stealing Japanese companies’ lunch.
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