NEW YORK (AP) -- Standard & Poor's Rating Services on Thursday lowered its non-investment grade corporate credit and senior unsecured debt ratings for MEMC Electronic Materials Inc. to "B+" from "BB," citing the uncertainty surrounding the company's turnaround.
S&P said the ratings are no longer under review for possible downgrade but the outlook is "negative."
The St. Peters, Mo.-based company makes silicon wafers for solar panels and semiconductor wafers. It announced in December it would will eliminate about 20 percent of its workforce and cut production, slashing costs as it deals with weak demand in the solar energy and chip markets.
The ratings service said that while the company's restructuring, originally announced in December, may deliver benefits in the long run, the company will burn through cash in the first half of this year as it shutters its solar materials business.
Whether the company will be able to support its sizable debt will depend substantially on whether it can continue to sell solar photovoltaic systems into a market dealing with weakening demand, industry consolidation, and tough competition, S&P said.
S&P also said that the series of management changes at the company, including last week's resignation of its chief financial officer, add to the uncertainty.
MEMC issued a statement Thursday, saying that while it's disappointed with the rating change, it's comfortable that it has enough cash and liquidity to meet its current needs.
In afternoon trading, MEMC shares fell 10 cents, or 6 percent, to $1.58 after dropping as low as $1.55 earlier in the day and coming within pennies of its 52-week low of $1.53.
Since the beginning of this year, MEMC shares have lost about 57 percent of their value.
