TOKYO (Reuters) - Shares in Japan's Toshiba sank 10 percent on Friday, after credit rating firm S&P Global said it could slash the conglomerate's rating several notches if financial support from lenders includes any form of debt restructuring.

The rating firm said in a note that such a move would be seen as "selective default".

Toshiba, rated CCC+ by S&P - a junk rating defined as posing substantial risks - is already on credit watch with negative implications, after downgrades in December and January.

The comments from S&P may persuade bankers to tread more carefully when considering ways they can help shore up the struggling conglomerate's finances as it scrambles for cash to stay in business after a multi-billion dollar writedown at its nuclear operations.

"Given Toshiba's already very fragile financial standing, whether the company can receive continuous financial support from its creditor banks, including liquidity support, is a key factor in our credit analysis," S&P said in a statement issued on Friday.

"Even in the event banks continue to provide financial support for the company, if it includes any form of debt restructuring we define as selective default, we will lower the ratings by multiple notches."

Sumitomo Mitsui Banking Corp (SMBC) on Thursday said it will provide as much support as possible to the troubled Japanese firm. The unit of Sumitomo Mitsui Financial Group Inc together with Mizuho Financial Group Inc are the company's main lenders.

Toshiba, which had been planning a quick sale of less than 20 percent of its NAND flash memory unit, is consider selling most, or even all, of its stake in the prized business some time after March 31, a person familiar with the plan said earlier, highlighting the scale of its financial woes.

At a meeting with its creditors on Wednesday, Toshiba executives asked for an extension of a waiver for a loan covenant violation until the end of next month, other financial sources said.

At around 0445 GMT, Toshiba shares were down 10 percent, underperforming a broader market that was down 0.6 percent.

(Reporting by Junko Fujita and Tim Kelly; Editing by Clara Ferreira Marques and Christopher Cushing)