Breach of financial covenants and support from financial institutions
First written in FY2020. 4 of 7 entries say "Mitigated", first in FY2021. Latest entry: FY2026.
The whole theme swung hardest in 2022: 4 of 13 companies on the "Worse" side.
15 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「For the current consolidated fiscal year, net cash amounted to ¥96.2 billion, an increase of ¥58.4 billion year on year, due to strong business performance and improved capital efficiency.」
Financial improvement following the breach of financial covenants progressed to stronger financial flexibility, reflected in net cash of ¥96.2 billion, lower interest-bearing debt, and an equity ratio of 57.8%. - FY2025MitigatedAnnual report
「For the fiscal year, strong performance and improved capital efficiency resulted in a net debt-to-equity ratio of -10:110, compared with 8:92 for the previous fiscal year, with cash and cash equivalents exceeding interest-bearing debt.」
As part of the funding and financial improvement process following the breach of financial covenants, the net D/E ratio moved into a net cash position, indicating an improvement in financial flexibility. - FY2024MitigatedAnnual report
「We had previously entered into a commitment line agreement with a one-year term, but in October 2023 entered into a long-term commitment line agreement with a three-year term.」
As part of its liquidity measures following the breach of financial covenants, the company changed the ¥60 billion commitment line from a one-year agreement to a three-year agreement. - FY2021MitigatedAnnual report
「The breach of financial covenants was resolved during the consolidated fiscal year after we obtained the lending financial institutions’ consent to waive their right to demand acceleration of the loans during the period and entered into amendment agreements involving revisions to the financial covenants in certain syndicated loan and commitment line agreements.」
The breach of financial covenants was resolved through the consent of financial institutions and amendments to the agreements. The company is working to secure stable funding and maintain liquidity, including through hybrid loans. - FY2021-Q2RestatedAnnual report
「As a result of recording a net loss attributable to owners of the parent in the previous consolidated fiscal year, we remained in breach as of the end of the current second-quarter consolidated accounting period of the financial covenants stipulated in certain syndicated loan and commitment line agreements entered into by the Group with financial institutions. However, our principal lending financial institutions have indicated their intention to continue financing our existing borrowings after recognizing the above situation. As we expect to receive support from financial institutions, including amendments to the relevant covenants and changes to the terms of the agreements, we determined that no material uncertainty existed regarding the going-concern assumption.」
The breach of financial covenants continued at the end of the first half. At the same time, the company continued to indicate that it expected support from financial institutions, including continued lending and amendments to the agreements. - FY2021-Q1RestatedAnnual report
「As a result of recording a net loss attributable to owners of the parent in the previous consolidated fiscal year, we remain in breach, during the current first-quarter consolidated cumulative period, of the financial covenants stipulated in certain syndicated loan and commitment line agreements entered into by the Group with financial institutions.」
The breach of financial covenants continued into the first quarter. However, based on the expected support from financial institutions, including continued lending and amendments to the covenants, the company determined that no material uncertainty existed regarding the going-concern assumption. - FY2020First statedAnnual report
「We are in breach of the financial covenants stipulated in certain syndicated loan and commitment line agreements entered into with financial institutions. However, our principal lending financial institutions have indicated their intention to continue financing our existing borrowings after recognizing the above situation, and we expect to receive support from financial institutions.」
Amid a ¥38.5 billion net loss attributable to owners of the parent, net assets of ¥172.1 billion, and a D/E ratio of 1.70x, the breach of financial covenants was disclosed explicitly for the first time. At the same time, the company stated that it expected support from financial institutions, including continued lending and amendments to the agreements.