Risk of Breaching Financial Covenants under a Syndicated Loan
First written in FY2024. 1 of 3 entries say "Restated". Latest entry: FY2026.
- FY2026MitigatedAnnual report
「The syndicated loan agreement executed on 27 October 2023, with a total commitment of ¥2,700 million and outstanding borrowings of ¥1,215 million at the end of the previous fiscal year and ¥945 million at the end of the current fiscal year, contains the following financial covenants.」
The financial covenants remain in place, but outstanding syndicated loan borrowings decreased from ¥1,215 million to ¥945 million. - FY2025RestatedAnnual report
「The syndicated loan agreement executed on 27 October 2023, with a total commitment of ¥2.7 billion and borrowings of ¥2.565 billion at the end of the previous consolidated fiscal year and ¥1.215 billion at the end of the current consolidated fiscal year, contains the following financial covenants:」
The company continues to disclose the net asset maintenance threshold and the requirement to avoid ordinary losses for 2 consecutive fiscal years. Borrowings declined from ¥2.565 billion to ¥1.215 billion, but the risk of immediate repayment in full and termination of the agreement in the event of a breach remains. - FY2024First statedAnnual report
「The syndicated loan agreement executed on 27 October 2023, with a total commitment of ¥2.7 billion and borrowings of ¥2.565 billion as of 30 June 2024, contains the following financial covenants: ① From the fiscal year ended June 2024 onward, the amount of consolidated net assets at the end of each fiscal year must be maintained at or above the higher of 75% of consolidated net assets at the end of the fiscal year ended June 2023 and 75% of consolidated net assets at the end of the immediately preceding fiscal year. ② For 2 consecutive fiscal years beginning with the fiscal year ended June 2024, ordinary profit or loss shown in the consolidated statements of income for each fiscal year must not be a loss for 2 consecutive fiscal years.」
For the syndicated loan obtained in connection with the acquisition of the Imada Construction Group, the company disclosed for the first time the net asset maintenance threshold and the requirement to avoid ordinary losses for 2 consecutive fiscal years. It explained that a breach could result in the borrowings becoming immediately repayable in full and the agreement being terminated.