Rising Interest Rates and Breaches of Financial Covenants
First written in FY2024. 6 of 7 entries say "Worsened", first in FY2025-H1. Latest entry: FY2026.
TAUNS Laboratories moved to the "Worse" side of this theme in 2025, 2 years after the typical company in this theme (2023).
17 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Outstanding borrowings: ¥10,162.109 million」
In connection with construction of the new plant and other projects, outstanding borrowings under the syndicated loan increased from ¥6,945 million in the previous fiscal year to ¥10,162.109 million. The company stated that it was not in breach of any financial covenants. - FY2026-H1WorsenedAnnual report
「We have entered into a syndicated loan agreement with 4 relationship banks. The agreement and financial covenants are as follows: borrowings outstanding, ¥10,338 million.」
Borrowings outstanding under the syndicated loan reached ¥10,338 million due to borrowings for construction of the new plant and other purposes. The company was not in breach of its financial covenants at the end of the interim accounting period. - FY2025WorsenedAnnual report
「During the fiscal year (from 1 July 2024 to 30 June 2025), we entered into a syndicated loan agreement with 4 relationship banks, with borrowings outstanding of ¥6,945 million.」
Outstanding borrowings under the syndicated loan increased from ¥2,803 million in the previous fiscal year to ¥6,945 million, and long-term borrowings also increased. The company was not in breach of its financial covenants at the end of the fiscal year. - FY2025-H1WorsenedAnnual report
「Total liabilities increased by ¥4,126.829 million from the end of the previous fiscal year to ¥19,721.395 million. This was mainly due to an increase in long-term borrowings following the partial drawdown of a syndicated loan facility arranged with financial institutions to fund construction of the new plant. The company was not in breach of its financial covenants at the end of the interim accounting period.」
The syndicated loan was partially drawn to fund construction of the new plant, increasing long-term borrowings from ¥4,307 million to ¥8,083 million. The company disclosed that it was not in breach of its financial covenants. - FY2024First statedAnnual report
「We recognize that interest-bearing debt is substantial relative to revenue. If market interest rates rise in the future, our borrowing rates are also expected to increase.」
The financial covenants require the company to maintain net assets at 75% or more of the benchmark amount and not incur ordinary losses for 2 consecutive periods.