NEW YORK (AP) – RadioShack’s credit rating was downgraded by Fitch Ratings Friday, a day after the electronics retailer warned it may need to file for Chapter 11 bankruptcy protection.
Fitch said cut RadioShack’s issuer default rating one notch to “C” from “CC,” which puts the retailer’s credit rating one level above default. That means the company is likely to be unable to pay its debts.
The downgrade comes after another credit ratings agency, Standard & Poor’s Ratings Services, cut RadioShack’s corporate credit rating further into junk territory on Thursday.
RadioShack said in a regulatory filing Thursday that is talking with its lenders, bondholders, shareholders and landlords to fix its balance sheet. But if it can’t, it will file for bankruptcy protection. The Fort Worth, Texas-based company has been trying to turn around its business for the past 18 months.
Fitch said that RadioShack, which has more than 5,000 stores around the world, may have a funding shortfall during the holiday season.
RadioShack Corp. declined to comment Friday.
Its shares fell 12 cents to 90 cents in midday trading Friday. They are down 77 percent over the past year.