JCR cuts Showa Shell Sekiyu ratings

(SeeNews) – Aug 9, 2012 - Japan Credit Rating Agency (JCR) slashed Thursday the ratings on Japanese oil firm Showa Shell Sekiyu KK's (TYO:5002) senior debts and JPY-100-billion (USD 1.27bn/EUR 1.03bn) shelf registration by one notch to A and preliminary A, respectively.

The agency also lifted the outlook on the senior debt rating to "stable" from "negative" and affirmed the J-1 rating on the company's commercial paper.

Showa Shell Sekiyu has a strong position in oil refining and distribution, backed by stockholders Shell Group and Saudi Aramco Group. In addition to its core oil operation, the firm is active in solar power production, via its unit Solar Frontier KK, and in terms of capacity it is ranked among the global players, the agency notes.

While the solar unit will see higher demand due to the start of a feed-in tariff scheme for renewable energy, earnings will not be boosted as fast as previously expected amid tough competition, which prompted the downward rating action, JCR said.

Rating agency website: www.jcr.co.jp

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