S&P upgrades Sharp

S&P said it raised the long-term corporate credit and debt ratings on Sharp Corp. to B- from CCC+ and short-term corporate credit and commercial-paper program ratings to B from C.

The agency also removed the ratings from CreditWatch.

S&P also upgraded the ratings on subsidiary Sharp International Finance (U.K.) plc, including its long-term corporate credit rating to B- from CCC+ and short-term corporate credit and commercial-paper program ratings to B from C.

The outlook on both companies is positive.

The upgrades follow the Aug. 12 completion of a new share issuance through third-party allocations to Hon Hai Precision Industry Co. Ltd., the agency said.

The capital increase improved Sharp's capital base significantly, but S&P said it believes the company will take time to recover its business competitiveness and cash-flow generation within Hon Hai group, S&P said.

Nevertheless, Sharp is important to Hon Hai's medium- to long-term business strategy under which Hon Hai aims to change its business model from its current one as an electronics manufacturing service provider, the agency said.

As a result, S&P said it believes Hon Hai is likely to give Sharp reasonable support in the event it is financially weakened.

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