Debt Increase and Financial Covenant Risks Associated with the Speedway Acquisition
First written in FY2021-Q3. 6 of 11 entries say "Worsened", first in FY2021. Latest entry: FY2026.
Seven & i Holdings moved to the "Worse" side of this theme in 2021, 3 years before the typical company in this theme (2024).
The whole theme swung hardest in 2025: 16 of 29 companies on the "Worse" side.
12 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「Liabilities decreased by 1,668,136 million yen from the end of the previous consolidated fiscal year to 5,494,762 million yen, mainly due to the deconsolidation of Seven Bank, Ltd. and its subsidiaries, among other factors.」
The financial exposure that had expanded after the acquisition of Speedway decreased as total liabilities fell due to the deconsolidation of Seven Bank and other entities and debt repayments. - FY2025-H1WorsenedAnnual report
「Liabilities increased by ¥939,674 million from the end of the previous fiscal year to ¥7,631,166 million, due to foreign exchange rate fluctuations and an increase in interest-bearing debt resulting from financing associated with the acquisition of SEA and other factors.」
Funding associated with the acquisition of SEA and other factors increased total liabilities to 7,631,166 million yen, causing the financial exposure that had once been reduced after the acquisition of Speedway to expand again. - FY2025-Q1WorsenedAnnual report
「Liabilities increased by ¥540,747 million from the end of the previous fiscal year to ¥7,232,240 million, due to foreign exchange rate fluctuations and an increase in interest-bearing debt resulting from financing associated with the acquisition of SEA and other factors.」
Funding associated with the acquisition of SEA Australia increased interest-bearing debt, causing the financial exposure that had been reduced after the acquisition of Speedway to expand again. - FY2024MitigatedAnnual report
「Liabilities decreased by 211,301 million yen from the end of the previous consolidated fiscal year to 6,691,492 million yen, mainly due to a decrease in long-term borrowings and other factors.」
Regarding the financial exposure expanded after the acquisition of Speedway, total liabilities decreased by 211,301 million yen from the end of the previous fiscal year due to a decrease in long-term borrowings and other factors. - FY2024-Q2MitigatedAnnual report
「Although interest-bearing debt decreased due to bond redemptions and other factors, liabilities increased by ¥28,201 million from the end of the previous fiscal year to ¥6,930,995 million, mainly due to the recognition of a provision for losses related to the transfer of department stores.」
Interest-bearing debt, which had increased after the acquisition of Speedway, is stated to have decreased due to bond redemptions and other factors. Meanwhile, total liabilities increased due to the recognition of provisions and other factors. - FY2024-Q1MitigatedAnnual report
「Liabilities increased by 42,681 million yen from the end of the previous consolidated fiscal year to 6,945,476 million yen, as an increase in deposits received due to seasonal factors and other items exceeded a decrease in interest-bearing debt due to bond redemptions and other factors.」
Regarding the financial exposure expanded through the acquisition of Speedway, interest-bearing debt decreased due to bond redemptions and other factors. Meanwhile, total liabilities increased due to higher deposits received and other factors. - FY2022WorsenedAnnual report
「Liabilities increased by 1,476,049 million yen from the end of the previous consolidated fiscal year to 5,591,546 million yen, mainly because 7-Eleven, Inc. raised part of the funds for the acquisition of Speedway through bonds and borrowings, among other factors.」
Bond issuance and borrowing associated with the acquisition of Speedway were realized, increasing liabilities by 1,476,049 million yen from the end of the previous fiscal year. Exposure to financial covenants, refinancing, and credit ratings continues. - FY2022-Q2WorsenedAnnual report
「Liabilities increased by ¥1,585,139 million from the end of the previous fiscal year to ¥5,700,637 million, mainly because 7-Eleven, Inc. raised part of the funds for the acquisition of Speedway through the issuance of bonds and borrowings.」
Debt increased to 5,700,637 million yen through bond issuance and borrowings to fund the acquisition of Speedway, expanding financial exposure related to financial covenants and early repayment. - FY2022-Q1WorsenedAnnual report
「Liabilities increased by 1,336,957 million yen from the end of the previous consolidated fiscal year to 5,452,454 million yen, mainly because 7-Eleven, Inc. raised part of the funds for the acquisition of Speedway through bond issuance, among other factors.」
Debt financing through bond issuance and other means for the acquisition of Speedway increased liabilities by 1,336,957 million yen from the end of the previous fiscal year to 5,452,454 million yen, expanding the financial exposure associated with the acquisition. - FY2021WorsenedAnnual report
「The Company has substantial debt, including significant borrowings from financial institutions to fund this transaction. In addition, some of the Group's debt is subject to financial covenants, and a breach of these covenants could affect the Company's financial condition through early repayment of the debt and other measures.」
Substantial borrowings and bond issuance associated with the acquisition of Speedway were executed, increasing interest-bearing debt. The possibility of breaching financial covenants continues to be identified as a risk. - FY2021-Q3First statedAnnual report
「The acquisition cost of this transaction (Note 1) is $21,000 million (¥2,217,600 million (Note 2)). Although this depends on the results of the purchase price allocation after completion of the transaction, goodwill and other intangible assets are expected to be recognized upon completion of the transaction. In addition, the funds required for this transaction are expected to be raised through debt financing by the Company and 7-Eleven, Inc., including bridge loans. Financial covenants and other conditions may be attached to the interest-bearing debt to be raised in the future. If the Group subsequently breaches these conditions and is required to repay the interest-bearing debt in full, this could affect the Group's operating results and financial condition.」
Assuming an acquisition cost of $21,000 million for Speedway, the Company plans to use debt financing and identified a substantial increase in interest-bearing debt, the risk of breaching financial covenants, and the possibility of repayment in full as new financial risks.