Toshiba shares hammered after credit rating warning

Toshiba owns a 60 per cent stake in NuGen, the group tasked with building a multibillion-pound nuclear power project in Cumbria

On Friday shares in Toshiba tumbled close to 10 per cent having already slipped more than 8 per cent on Tuesday (Thomson Reuters Eikon)

Shares in Toshiba suffered a fresh battering on Friday after Standard & Poor’s said that it might slash the company’s credit rating by several notches.

The ratings company said that if the Japanese conglomerate received financial support that involved it restructuring its debt, S&P would consider it to be entering ‘selective default’.

S&P currently has a rating of CCC+ on Toshiba, implying that holders of its debt face substantial risk of not being repaid. It cut its rating last month and in December.

On Friday shares in Toshiba tumbled close to 10 per cent having already slipped more than 8 per cent on Tuesday after the group’s chairman resigned on the back of the company saying that it would book multi billion-dollar losses on its nuclear operations.

Whatever happens to Toshiba now could also have serious implications for the UK’s energy sector.

Toshiba owns a 60 per cent stake in NuGen, the group tasked with building a multibillion-pound nuclear power project in Cumbria that could create more than 20,000 jobs in the region.

Earlier this week, Kevin Coyne, an officer for trade union Unite, said Toshiba's announcement “is potentially a deeply troubling development and points to the need for the Government to take a more strategic approach in bringing new nuclear power stations on stream”.

Shares in Toshiba have now fallen 60 per cent since 13 December and 22.6 per cent this week.

Additional reporting by agencies