Risk of breaching financial covenants due to ordinary losses for 2 consecutive periods
First written in FY2016. 3 of 8 entries say "Restated". Latest entry: FY2019.
Nagaoka International moved to the "Worse" side of this theme in 2017, 6 years before the typical company in this theme (2023).
The whole theme swung hardest in 2017: 8 of 54 companies on the "Worse" side.
8 other companies' latest entry also says "Dropped".
- FY2019DroppedAnnual report
「In the previous consolidated fiscal year, the company had entered into a bilateral commitment line agreement with one relationship bank. The agreement was cancelled on 12 February 2019.」
The previous commitment line agreement was cancelled on 12 February 2019, and as of the end of the current consolidated fiscal year, neither the balance nor the financial covenants concerning ordinary profit and other matters under that agreement are disclosed. - FY2018ReframedAnnual report
「Current consolidated fiscal year, 30 June 2018: ① At each fiscal year-end from the fiscal year ended June 2018 onward, consolidated net assets must be maintained at no less than 75% of the amount for the same period of the previous year. ② From the fiscal year ended June 2018 onward, the consolidated income statement for each fiscal year-end must not show an ordinary loss.」
The contractual terms have changed from the previous covenant prohibiting standalone ordinary losses for 2 consecutive periods to covenants requiring consolidated net assets to be maintained at no less than 75% of the previous year's level and consolidated ordinary profit to remain positive. - FY2018-Q3RestatedAnnual report
「There has been no change in the substance of the financial covenants under the agreement or in the status of consent to waive the right to demand acceleration.」
The company states that there has been no change in the financial covenants under the syndicated agreement whose term was extended or in the status of consent to waive the right to demand acceleration. - FY2018-Q1ReframedAnnual report
「The company has entered into new bilateral commitment line agreements with financial institutions that did not participate in the extension of the above agreement. The new agreements contain the following financial covenant: ② The standalone income statement for fiscal years beginning after the date of execution of this agreement must not show an ordinary loss.」
While the financial covenants under the existing agreement have not changed, the new bilateral agreements with financial institutions that did not participate in the extension include a covenant requiring standalone ordinary profit to remain non-negative in each fiscal year. - FY2017-Q3RestatedAnnual report
「Furthermore, because the company is expected to report an ordinary loss for the current consolidated fiscal year, following the previous consolidated fiscal year, it may in the future breach the financial covenants under the commitment line agreement entered into with its relationship financial institutions.」
The company continues to disclose the outlook for ordinary losses for 2 consecutive periods and the possibility of breaching the financial covenants. - FY2017-Q2WorsenedAnnual report
「Because the company is expected to report an ordinary loss for the current consolidated fiscal year, following the previous consolidated fiscal year, it may in the future breach the financial covenants under the commitment line agreement entered into with its relationship financial institutions.」
The company indicates that an ordinary loss is expected for 2 consecutive periods and explicitly states the possibility of breaching the existing financial covenants. - FY2017-Q1RestatedAnnual report
「The original agreement before renewal continues to include the provision that the standalone income statement included in reports and other documents for the fiscal year ended June 2015 and each subsequent fiscal year-end must not show an ordinary loss for 2 consecutive periods.」
The previous financial covenant concerning ordinary losses for 2 consecutive periods remains in place. - FY2016First statedAnnual report
「The standalone income statement included in reports and other documents for the fiscal year ended June 2015 and each subsequent fiscal year-end must not show an ordinary loss for 2 consecutive periods.」
The disclosure states that a breach would result in loss of the benefit of time and require repayment of principal, interest, and other amounts. No breach has occurred at present.