Material Doubt Regarding Going Concern Arising from Breach of Financial Covenants
First written in FY2019. 1 of 4 entries say "Mitigated", first in FY2020-Q1. Latest entry: FY2020.
The whole theme swung hardest in 2024: 2 of 6 companies on the "Worse" side.
0 other companies' latest entry also says "Dropped".
- FY2020DroppedAnnual report
「(Matters related to the going-concern assumption) Not applicable.」
The disclosure of significant doubt regarding the going concern assumption included in the previous fiscal year is no longer included in the notes for the current fiscal year. - FY2020-Q2RestatedAnnual report
「Circumstances exist that raise significant doubt about the assumption that the Group will continue its business activities in the future.」
Circumstances raising significant doubt about the going concern assumption continue to be disclosed. However, the company has determined that no material uncertainty exists as a result of repaying the syndicated loan, switching to short-term borrowings without financial covenants, reaching agreements with its financial institutions and implementing earnings improvement measures. - FY2020-Q1MitigatedAnnual report
「Regarding the breaches of the financial covenants, we explained the above initiatives to improve earnings to our lending financial institutions. For the syndicated loan agreement, we repaid the full amount by the contractual due date of 31 July 2019 and drew down a new short-term loan of ¥1,000.000 million without financial covenants. Regarding the term-out revolving credit facility agreement, we obtained agreement from our lending financial institutions not to exercise their right to demand the loss of the benefit of time.」
Although circumstances raising significant doubt about the going concern assumption continue to be disclosed, the company has implemented earnings improvement measures, refinancing and agreements with its financial institutions, and has determined that no material uncertainty exists regarding the going concern assumption. - FY2019First statedAnnual report
「The Group recorded an operating loss of ¥577.458 million for the consolidated fiscal year. In addition, it recorded an equity-method investment loss of ¥713.607 million, an impairment loss of ¥349.763 million and a loss on valuation of investment securities of ¥94.878 million. As a result, the Group recorded a net loss attributable to owners of the parent of ¥1,712.709 million, leading to a substantial decrease in net assets. Furthermore, the syndicated loan agreement (1) of ¥1,750.000 million and the term-out revolving credit facility agreement (2) of ¥1,000.000 million entered into with the Group's lending financial institutions contain financial covenants. As a result of the operating loss and substantial decrease in net assets described above, the Group breached the financial covenants, creating circumstances that raise significant doubt about the assumption that it will continue its business activities in the future.」
The recording of an operating loss, equity-method investment loss, impairment loss and loss on valuation of investment securities, together with breaches of financial covenants, resulted in the first explicit disclosure of circumstances raising significant doubt about the going concern assumption. However, the company has obtained agreement from its financial institutions not to exercise their right to demand the loss of the benefit of time, and has determined that no material uncertainty exists regarding the going concern assumption.