Toshiba Corp.

We have placed our long-term issuer credit rating on Toshiba on CreditWatch with negative implications. We will examine the details of and progress in Toshiba's plan to split and its relationship with its main lender banks, reflecting any impact into our rating on the company. We may consider downgrading the company and keeping it on CreditWatch if the intentions of shareholders of the company remain unclear after an extraordinary shareholders' meeting scheduled for the first quarter of 2022 (January to March). In that case, we could come to believe that management disarray will be prolonged and the company's business performance and distribution of cash flow is likely to worsen. Ultimately, resolving the CreditWatch placement may not happen until the second

...Toshiba Corp.'s competitive position, which currently underpins our ratings on the company, will highly likely weaken if it splits into three companies in the second half of fiscal 2023 (October 2023 to March 2024) as planned, in S&P Global Ratings' view. This is because most of Toshiba's business base and cash flow sources will be transferred to the newly established companies. Its competitiveness in a wide range of businesses, the solid market position of a part of its business as a capital goods major, and relatively sound financial standing currently underpin our ratings on the company. Furthermore, how assets, liabilities, and shareholders' equity will be allocated at the time of the split is unknown. We expect Toshiba's business performance on a consolidated basis to remain stable in the next year or so. Toshiba's management has been in disarray since April 2021, when top management resigned and amid a complex relationship with shareholders, including activist investors. Nevertheless,...

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