Risks from a High Interest-Bearing Debt Ratio and Financial Covenants
First written in FY2021. 11 of 15 entries say "Restated". Latest entry: FY2026.
Stella Pharma moved to the "Worse" side of this theme in 2026, 3 years after the typical company in this theme (2023).
The whole theme swung hardest in 2017: 8 of 54 companies on the "Worse" side.
22 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Interest-bearing debt as a percentage of total assets was 25.3% in the fiscal year ended March 2023, 24.4% in the fiscal year ended March 2024, 14.2% in the fiscal year ended March 2025 and 16.7% in the fiscal year ended March 2026. Although the ratio of interest-bearing debt had been declining through the end of the previous fiscal year, it increased during the fiscal year under review because of additional borrowings.」
The disclosure states that interest-bearing debt as a percentage of total assets turned upward, increasing from 14.2% to 16.7%. No financial covenants had been breached. - FY2026-H1RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the interim accounting period under review.」
While disclosing the existence of a syndicated loan agreement and financial covenants, the disclosure states that none had been breached as of the end of the interim accounting period. - FY2025MitigatedAnnual report
「In addition, interest-bearing debt as a percentage of total assets was 25.3% in the fiscal year ended March 2023, 24.4% in the fiscal year ended March 2024 and 14.2% in the fiscal year ended March 2025, and the ratio of interest-bearing debt declined.」
The disclosure states that interest-bearing debt as a percentage of total assets declined from 24.4% to 14.2%. However, borrowings subject to financial covenants remain in place. - FY2025-H1RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the interim accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the interim accounting period. - FY2024-Q3RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the third quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the third quarter accounting period. - FY2024-Q2RestatedAnnual report
「For each fiscal year-end from the fiscal year ended March 2020 onward, all of the following requirements must be observed: (1) Maintain the combined total pretax net income for 2 consecutive periods in the income statement, with the first periods being the fiscal years ended March 2020 and March 2021, at ¥3.5 billion or more, stated as a negative amount. (2) Maintain the amount of net assets on the balance sheet as of the end of each fiscal year beginning after the IPO date at or above the outstanding loan balance. (3) From the lending date until the IPO date, during the period beginning at the end of July 2020, maintain cash and deposits at or above the amount obtained by deducting ¥1 billion from the outstanding loan balance. We were not in breach of any financial covenants as of the end of the second quarter accounting period under review.」
The disclosure describes the financial covenants and states that none had been breached as of the end of the second quarter accounting period under review. - FY2024-Q1RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the first quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the first quarter accounting period. - FY2023-Q3RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the third quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the third quarter accounting period. - FY2023-Q2RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the second quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the second quarter accounting period under review. - FY2023-Q1RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the first quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the first quarter accounting period under review. - FY2022MitigatedAnnual report
「Interest-bearing debt as a percentage of total assets was 69.0% in the fiscal year ended March 2021 and 26.6% in the fiscal year ended March 2022. The ratio of interest-bearing debt declined in the fiscal year ended March 2022 because total assets, including cash and deposits, increased in connection with the new listing.」
The disclosure states that the interest-bearing debt ratio declined from 69.0% to 26.6%. However, the existence of financial covenants and the possibility of increased borrowings in the future remain. - FY2022-Q3RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the third quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the third quarter accounting period. - FY2022-Q2RestatedAnnual report
「If we breach an obligation specified in the covenants, we will lose the benefit of the term of the loans at the lending bank's request and will be obligated to repay them immediately. We were not in breach of any financial covenants as of the end of the second quarter accounting period under review.」
The disclosure describes financial covenants, including a requirement to maintain net assets of at least ¥1.6 billion, and a commitment line agreement, while stating that none had been breached as of the end of the second quarter. - FY2022-Q1RestatedAnnual report
「We were not in breach of any financial covenants as of the end of the first quarter accounting period under review.」
While disclosing the existence of financial covenants, the disclosure states that none had been breached as of the end of the first quarter. - FY2021First statedAnnual report
「Interest-bearing debt as a percentage of total assets remained high, at 59.1% in the fiscal year ended March 2020 and 69.0% in the fiscal year ended March 2021. Our borrowings are subject to financial covenants. Although we have built good relationships with our lending banks, if we breach these covenants, we may lose the benefit of the term of the loans, potentially giving rise to serious concerns about our ability to continue operating our business.」
The disclosure quantifies the interest-bearing debt ratio and financial covenants and identifies the loss of the benefit of the term of the loans upon a breach as a risk.