Risk of lease payments becoming uncollectible due to lessee bankruptcy, etc.
First written in FY2016. 4 of 11 entries say "Restated". Latest entry: FY2024.
Financial Partners Group moved to the "Worse" side of this theme in 2020.
1 other company's latest entry also says "Restated".
- FY2024RestatedAnnual report
「If, for any reason, including the commencement of legal insolvency proceedings, the lessee fails to pay lease rentals to our subsidiary (SPC) or the trustee in accordance with the contractual terms, the operating lease business's operating results and earnings may deteriorate, potentially causing investors to incur losses.」
The company continues to disclose the risk of nonpayment of lease rentals due to the lessee's bankruptcy or other events and cites measures such as selecting lessees with strong creditworthiness. - FY2022-Q3RestatedAnnual report
「Regarding the operating lease business in which Air Mauritius Limited, for which loss recognition was completed in the previous consolidated fiscal year, is the lessee (the business is referred to below as the "AML transaction"), although a loss of ¥998 million was recognized in the previous third quarter cumulative consolidated period, no such loss occurred in the current third quarter cumulative consolidated period, and as the accounting treatment has been completed,」
It continues to explain that loss recognition for the AML transaction was completed in the previous fiscal year and that the ¥998 million loss incurred in the same period of the previous year did not recur in the current cumulative quarter. - FY2022-Q2MitigatedAnnual report
「Regarding the operating lease business in which Air Mauritius Limited, for which loss recognition was completed in the previous consolidated fiscal year, is the lessee (the business is referred to below as the "AML transaction"), although a loss of ¥998 million was recognized in the previous second quarter cumulative consolidated period, no such loss occurred in the current second quarter cumulative consolidated period, and as the accounting treatment has been completed,」
For the AML transaction, loss recognition was completed in the previous consolidated fiscal year, and the ¥998 million loss recognized in the same period of the previous year did not recur in the current quarter. It states that the additional loss impact from the lessee issue has diminished. - FY2021-Q3WorsenedAnnual report
「As we concluded that the lease agreement is likely to remain unperformed in accordance with its terms and that it would be difficult to transfer the silent partnership interest to a third party unless conditions improve, and with the lease business expected to terminate,」
The company continues to determine that, even after AML's bankruptcy, no agreement has been reached to continue the lease agreement, that the agreement is likely to be breached, and that it would be difficult to transfer the silent partnership interest to a third party. - FY2021-Q2WorsenedAnnual report
「Although we are negotiating with the parties to the lease agreement regarding its continuation, no agreement had been reached as of the end of the second quarter of the fiscal year, approximately one year after AML's bankruptcy. In light of the progress of AML's rehabilitation and the business environment surrounding AML, we concluded that the lease agreement is likely to remain unperformed in accordance with its terms and that, unless conditions improve, it would be difficult to transfer the silent partnership interest to a third party, and」
It states that, even approximately one year after AML's bankruptcy, no agreement had been reached to continue the lease agreement, that the agreement was likely to remain unperformed in accordance with its terms, and that it would be difficult to transfer the silent partnership interest to a third party. - FY2021-Q1MaterialisedAnnual report
「With respect to the operating lease business in which Air Mauritius Limited is the tenant (the "AML transaction"), an impairment loss and net expense totalling ¥998 million were recognised」
Credit and payment-related risks involving the tenant in the AML transaction continued to affect actual results, and an impairment loss and net expense totalling ¥998 million was recognised during the quarter under review. - FY2020MaterialisedAnnual report
「Following AML's application for Voluntary Administration on 22 April 2020 (local time), 3 SPCs, subsidiaries of the company and the operators of silent partnerships for the relevant lease business, were included in the scope of consolidation, and an impairment loss and net expense totalling ¥2,661 million were recognised.」
Following tenant AML's application for Voluntary Administration, the risk of tenant payment default was reflected in the annual results through the consolidation of 3 SPCs and recognition of an impairment loss and net expense of ¥2,661 million. - FY2020-Q2MaterialisedAnnual report
「On 22 April 2020, Air Mauritius Limited (AML), a tenant in the operating lease business (the "lease business"), applied for Voluntary Administration under Mauritius's Insolvency Act due to deterioration in its business performance resulting from the spread of COVID-19.」
An event occurred in which AML, a tenant, applied for Voluntary Administration in connection with the risk of lease payments becoming uncollectible due to the tenant's legal insolvency proceedings or other events. - FY2018RestatedAnnual report
「If a tenant fails for any reason, including the commencement of legal insolvency proceedings, to pay lease payments to the company's subsidiary (SPC) or trustee in accordance with the contractual terms, the operating results and profit or loss of the operating lease business could deteriorate, and investors could incur losses.」
The company continues to disclose the risk of deterioration in operating results and investor losses arising from tenants' failure to pay lease fees. - FY2017RestatedAnnual report
「If a tenant fails for any reason, including the commencement of legal insolvency proceedings, to pay lease payments to the company's subsidiary (SPC) or trustee in accordance with the contractual terms, the operating lease business's operating results and profit or loss could deteriorate, and investors could incur losses.」
The company continues to disclose the risk of investor losses and an impact on results arising from tenants' failure to pay lease fees. - FY2016First statedAnnual report
「If lease payments are not made by a tenant to the company's subsidiary (SPC) for any reason, including the commencement of legal insolvency proceedings such as bankruptcy, civil rehabilitation or corporate reorganisation proceedings, the operating lease business could become less profitable and investors who have invested in the business could incur losses.」
The company also states that it forms transactions primarily involving major shipping companies, airlines and aircraft leasing companies, and plans to respond by selling the assets or seeking new tenants.