Financial Covenant Breach and Maintaining Liquidity with Support from Financial Institutions
First written in FY2024-Q2. 3 of 8 entries say "Mitigated", first in FY2025. Latest entry: FY2026.
Toho Zinc moved to the "Worse" side of this theme in 2023.
The whole theme swung hardest in 2024: 2 of 6 companies on the "Worse" side.
2 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「As of the end of the consolidated fiscal year, there were no instances of non-compliance with financial covenants.」
The Company stated that there were no financial covenant breaches and that, even after the amendment to the agreement on 30 January 2026, it was complying with the conditions concerning equity, liquidity, and ordinary profit. - 2026-05-14MitigatedRevision of earnings forecasts
「As a result, we have secured working capital and investment funds for the foreseeable future, and our major relationship banks have also expressed their continued support. Accordingly, we have determined that there are no material concerns regarding our liquidity.」
The company indicated that additional funding and support from financial institutions meant that there were no material concerns regarding liquidity. - FY2026-H1RestatedAnnual report
「At the end of the interim consolidated accounting period, there was no breach of any financial covenant.」
The Company reconfirmed that the financial covenant breached in the previous fiscal year was not in breach as of the end of the interim period. - FY2025MitigatedAnnual report
「As of the end of the consolidated fiscal year, there were no instances of non-compliance with financial covenants.」
Following the breach of financial covenants in the previous fiscal year, the Company stated that there was no breach at the end of the current fiscal year under a third-party allotment and an intercreditor agreement. New conditions were established concerning net assets, cash and the commitment line, and ordinary profit. - FY2025-H1RestatedAnnual report
「As the ¥11,000 million loan commitment agreement entered into on 24 September 2024 matured on 28 October 2024, the Company extended the contract period by 1 month.」
The loan commitment agreement with the financial institutions was extended by 1 month, and liquidity support continues. Significant doubt regarding the going concern assumption remains. - FY2024WorsenedAnnual report
「In fiscal 2023, the Group recognized an impairment loss of ¥21,763 million on property, plant and equipment following the decision to close the Rasp Mine of its consolidated Australian subsidiary CBH Resources Ltd., an equity-method investment loss of ¥9,724 million, including an impairment loss on the shares of Abra Mining Pty Ltd., an equity-method affiliate, and combined losses of ¥8,778 million from provisions for expected credit losses on loans to and advances for raw materials to that company and provisions for losses on guarantees of its debt.」
Financial covenant and liquidity risks continue due to substantial impairment losses, losses related to affiliates, and provisions for losses on guarantees. Of the ¥16,000 million commitment line, ¥11,000 million has been drawn. - FY2024-Q3WorsenedAnnual report
「At the end of the second-quarter consolidated accounting period, the Company was in breach of financial covenants under syndicated loan agreements with multiple financial institutions, but on 31 October 2023 it obtained the consent of its lending financial institutions not to exercise their right to accelerate repayment.」
The breach of the financial covenants continued, and the equity ratio fell to 17.3%, below the 20% threshold. At the same time, the Company obtained consent from its financial institutions not to exercise their right to accelerate repayment and received indications of continued support. - FY2024-Q2MaterialisedAnnual report
「At the end of the second-quarter consolidated accounting period, the Company breached financial covenants under syndicated loan agreements with multiple financial institutions: maintaining consolidated shareholders' equity as of 30 September 2023 at no less than 75% of the amount as of 31 March 2023, and maintaining a consolidated equity ratio of at least 20% as of both 31 March 2023 and 30 September 2023. However, on 31 October 2023, the Company obtained the consent of its lending financial institutions not to exercise their right to accelerate repayment under the affected agreements.」
An event occurred involving a breach of financial covenants requiring consolidated shareholders' equity of at least 75% and an equity ratio of at least 20%. The Company obtained consent from its financial institutions not to exercise their right to accelerate repayment and also received indications of continued financial support from its principal banks and other institutions.