S&P: Sanyo kept on watch

Standard & Poor's said its BB long-term corporate credit and BB+ long-term senior unsecured debt ratings on Sanyo Electric Co. Ltd. remain on CreditWatch with negative implications, following the release of the company's plan to raise capital and reshuffle management.

The agency noted Sanyo Electric plans to raise ¥300 billion in capital through issuance of preferred stock.

"Enhancement of Sanyo Electric's capital through the plan is within our expectations," said S&P credit analyst Katsuyuki Nakai.

"But, Sanyo Electric has yet to provide a specific plan for the strategic business alliance in its TV and white goods segments, as it announced in its medium-term management plan in November 2005."

Key factors for resolving the CreditWatch placement are Sanyo Electric's specific measures to bolster currently weak businesses and their impact on the company's financial performance, debt reduction and the source of repayments and the feasibility of its plan to increase profits from core businesses, S&P noted.

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