Risk of breaching financial covenants under syndicated loans
First written in FY2016. 2 of 10 entries say "Restated". Latest entry: FY2026.
OSAKA Titanium technologies 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.
1 other company's latest entry also says "Reframed".
- FY2026ReframedAnnual report
「The syndicated loan agreement dated 24 February 2022, arranged by Sumitomo Mitsui Banking Corporation (financial covenants): (1) Maintain total net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the fiscal year ending March 2022 and each subsequent fiscal year at or above the higher of an amount equivalent to 75% of total net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the fiscal year ended March 2021 and an amount equivalent to 75% of total net assets shown in the non-consolidated balance sheet in reports and other documents as of the end of the most recent fiscal year. (2) Operating cash flow shown in the cash flow statement in reports and other documents as of the end of the fiscal year ending March 2022 and each subsequent fiscal year must not be negative for 2 consecutive fiscal years.」
The disclosure of financial covenants for the year was organized around the net asset maintenance and operating cash flow conditions in the agreement dated 24 February 2022. The titanium business profit and positive operating income or loss conditions included in the 2021 agreement were not included in the current agreement disclosure. - FY2024MitigatedAnnual report
「(4) Operating income or loss shown in the non-consolidated income statement in reports and other documents as of the end of the fiscal year ending March 2023 and each subsequent fiscal year must not be a loss.」
While the financial covenants continued to be disclosed, operating profit was ¥8,288 million, cash flow from operating activities was ¥2,098 million, and net assets were ¥38,507 million for the year. Based on the disclosed figures, an operating loss was avoided. - FY2023MitigatedAnnual report
「(4) Operating income or loss shown in the non-consolidated income statement in reports and other documents as of the end of the fiscal year ending March 2023 and each subsequent fiscal year must not be a loss.」
While the financial covenants required that operating income or loss not be a loss, operating profit was ¥4,780 million, cash flow from operating activities was ¥741 million, and net assets were ¥30,474 million for the fiscal year ended March 2023. Based on the disclosed results, an operating loss was avoided. - FY2022Addition of a new agreementAnnual report
「The syndicated loan agreement dated 24 February 2022, arranged by Sumitomo Mitsui Banking Corporation (financial covenants): (1) Maintain total net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the fiscal year ending March 2022 and each subsequent fiscal year at or above the higher of an amount equivalent to 75% of total net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the fiscal year ended March 2021 and an amount equivalent to 75% of total net assets shown in the non-consolidated balance sheet in reports and other documents as of the end of the most recent fiscal year. (2) Operating cash flow shown in the cash flow statement in reports and other documents as of the end of the fiscal year ending March 2022 and each subsequent fiscal year must not be negative for 2 consecutive fiscal years.」
A new syndicated loan agreement dated 24 February 2022 was disclosed, adding financial covenants requiring maintenance of net assets at 75% and avoidance of two consecutive years of negative operating cash flow. - FY2021Refinancing and addition of new termsAnnual report
「The syndicated loan agreement dated 26 March 2021 and the commitment line agreement dated the same date, arranged by Sumitomo Mitsui Banking Corporation (financial covenants): (3) The segment profit of the titanium business shown in the segment information in reports and other documents as of the end of the fiscal year ending March 2022 must be at least equal to the segment profit of the titanium business shown in the segment information in reports and other documents as of the end of the fiscal year ended March 2021. (4) Operating income or loss shown in the non-consolidated income statement in reports and other documents as of the end of the fiscal year ending March 2023 and each subsequent fiscal year must not be a loss.」
The syndicated loan was refinanced and a commitment line agreement was added, with new financial covenants requiring maintenance of segment profit in the titanium business and positive operating income or loss from the fiscal year ending March 2023 onward. - FY2020RestatedAnnual report
「Maintain the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of each fiscal year at ¥25.4 billion or more, or at the higher of that amount and an amount equivalent to at least 75% of the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the most recent fiscal year.」
The financial covenants, including maintenance of net assets and avoidance of two consecutive years of negative cash flow from operating activities, were reiterated without change. - FY2019RestatedAnnual report
「Maintain the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of each fiscal year at ¥25.4 billion or more, or at the higher of that amount and an amount equivalent to at least 75% of the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the most recent fiscal year.」
The net asset maintenance and operating cash flow conditions for the syndicated loan with financial covenants were reiterated without change. - FY2018Addition of a new agreementAnnual report
「The syndicated loan agreement dated 28 November 2017, arranged by Sumitomo Mitsui Banking Corporation (financial covenants): (1) Maintain the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of each fiscal year at ¥25.9 billion or more, or at the higher of that amount and an amount equivalent to at least 75% of the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the most recent fiscal year.」
A syndicated loan agreement dated 28 November 2017 containing financial covenants was newly disclosed, with the net asset maintenance threshold set at the higher of ¥25.9 billion or 75% of the amount at the end of the most recent fiscal year. - FY2017Addition of a new agreementAnnual report
「The syndicated loan agreement dated 28 December 2016, arranged by Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank (financial covenants): (1) Maintain the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of each fiscal year at ¥25.4 billion or more, or at the higher of that amount and an amount equivalent to at least 75% of the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the most recent fiscal year.」
In addition to the existing agreements, a syndicated loan agreement dated 28 December 2016 containing financial covenants was added. The net asset maintenance threshold was set at the higher of ¥25.4 billion or 75% of the amount at the end of the most recent fiscal year. - FY2016First statedAnnual report
「Maintain the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of each fiscal year at ¥33.1 billion or more, or at the higher of that amount and an amount equivalent to at least 75% of the amount of net assets shown in the equity section of the balance sheet in reports and other documents as of the end of the most recent fiscal year.」
The covenants require maintenance of net assets and avoidance of two consecutive years of negative operating cash flow.