Borrowing and Financing Risks Arising from Financial Covenants
First written in FY2021-Q2. 8 of 17 entries say "Worsened", first in FY2021-Q3. Latest entry: FY2026.
- FY2026Renewal of borrowings subject to financial covenantsAnnual report
「The ¥5,000 million loan commitment agreement, including ¥3,100 million drawn, the ¥1,300 million term loan agreement with a drawdown availability period, including ¥1,187 million drawn, and ¥615 million of long-term borrowings, including ¥196 million repayable within 1 year, are subject to the following financial and asset covenants.」
The borrowings subject to the financial covenants have been updated, with changes to the total amount and drawn balance of the commitment agreement and an increase in the drawn balance of the term loan with a drawdown availability period. No covenant breach is reported. - 2026-03-17MitigatedOccurring Fact
「By establishing the commitment line under this agreement, we expect to improve the flexibility and stability of financing, enabling proactive business development while reducing financial expenses and improving capital efficiency.」
The company resolved to enter into a ¥5 billion commitment line agreement, establishing a framework to improve the flexibility and stability of financing. The agreement also includes financial covenants relating to the maintenance of net assets and ordinary income. - FY2026-H1Restructuring of borrowings subject to financial covenantsAnnual report
「Interim period of the current consolidated fiscal year (30 September 2025) The ¥6,000 million loan commitment agreement, including ¥3,500 million drawn, the ¥1,300 million term loan agreement with a drawdown availability period, including ¥927 million drawn, and ¥517 million of long-term borrowings, including ¥196 million repayable within 1 year, are subject to the following financial and asset covenants.」
The borrowings subject to the financial covenants have been updated, including the total amount and drawn balance of the loan commitment and the composition of long-term borrowings. A term loan agreement with a drawdown availability period has also been newly disclosed. No covenant breach is reported. - FY2025-H1WorsenedAnnual report
「Interim period of the current consolidated fiscal year (30 September 2024) The ¥7,800 million loan commitment agreement, including ¥5,400 million drawn, ¥909 million of long-term borrowings, including ¥196 million repayable within 1 year, and ¥470 million of short-term borrowings are subject to the following financial and asset covenants.」
The amount drawn under the loan commitment subject to the financial covenants increased from ¥4,900 million at the end of the previous fiscal year to ¥5,400 million. No covenant breach is reported. - FY2024MitigatedAnnual report
「The ¥7,800 million loan commitment agreement, including ¥4,900 million drawn, ¥1,008 million of long-term borrowings, including ¥196 million repayable within 1 year, and ¥470 million of short-term borrowings are subject to the following financial and asset covenants.」
The financial covenant terms remain in place, while the amount drawn under the loan commitment decreased from ¥5,700 million at the end of the previous fiscal year to ¥4,900 million. No covenant breach is reported. - FY2024-Q3Update to borrowing structureAnnual report
「Third quarter of the current consolidated fiscal year (31 December 2023) The ¥7,800 million loan commitment agreement, including ¥5,950 million drawn, ¥1,057 million of long-term borrowings, including ¥196 million repayable within 1 year, and ¥470 million of short-term borrowings are subject to the following financial and asset covenants.」
Although the financial covenant terms remain unchanged, the balance and composition of the borrowings subject to the covenants have been updated. The amount drawn under the loan commitment is ¥5,950 million, down from ¥6,300 million in the previous quarter, while ¥470 million of short-term borrowings is also listed as subject to the covenants. No covenant breach is reported. - FY2024-Q2WorsenedAnnual report
「Second quarter of the current consolidated fiscal year (30 September 2023) The ¥7,800 million loan commitment agreement, including ¥6,300 million drawn, and ¥1,134 million of long-term borrowings, including ¥224 million repayable within 1 year, are subject to the following financial and asset covenants.」
The amount drawn under the loan commitment increased from ¥5,700 million at the end of the previous consolidated fiscal year to ¥6,300 million, increasing the borrowing exposure subject to the financial covenants. No covenant breach is reported. - FY2024-Q1WorsenedAnnual report
「First quarter of the current consolidated fiscal year (30 June 2023) The ¥7,800 million loan commitment agreement, including ¥6,100 million drawn, and ¥1,225 million of long-term borrowings, including ¥266 million repayable within 1 year, are subject to the following financial and asset covenants.」
The amount drawn under the loan commitment increased from ¥5,700 million at the end of March 2023 to ¥6,100 million, increasing the borrowing exposure subject to the financial covenants. No covenant breach is reported. - FY2023-Q3MitigatedAnnual report
「Third quarter of the current consolidated fiscal year (31 December 2022) The ¥7,800 million loan commitment agreement, including ¥5,400 million drawn, and ¥1,408 million of long-term borrowings, including ¥351 million repayable within 1 year, are subject to the following financial and asset covenants.」
Although the financial covenant terms remain unchanged, the amount drawn under the loan commitment decreased from ¥6,600 million at the end of the previous consolidated fiscal year to ¥5,400 million. The filing does not state that a covenant breach had occurred. - FY2023-Q2WorsenedAnnual report
「The ¥7,800 million loan commitment agreement, including ¥7,000 million drawn, and ¥1,499 million of long-term borrowings, including ¥365 million repayable within 1 year, are subject to the following financial and asset covenants.」
The amount drawn under the loan commitment subject to the financial covenants increased from ¥6,600 million at the end of the previous consolidated fiscal year to ¥7,000 million. Equity also fell to ¥1,462 million, increasing the exposure to the financial covenants. - FY2022WorsenedAnnual report
「Some of the company’s borrowings are subject to financial covenants and asset covenants. If these financial or asset covenants are breached, the company could lose the benefit of time for repayment and suffer other consequences that could materially affect the financial condition of the group.」
In addition to financial covenants, asset covenants restricting organisational changes, mergers, company splits, capital reductions, and the transfer of businesses or assets were disclosed. The amount drawn had also reached ¥6,600 million. - FY2022-Q3WorsenedAnnual report
「During the 3-month period ended 31 December of the current consolidated fiscal year, the company recorded a substantial ordinary loss, having been significantly affected by the resurgence of COVID-19 infections and other factors. Some of the company’s borrowings are subject to financial covenants. If these covenants are breached, the company could lose the benefit of time for repayment and suffer other consequences that could materially affect the financial condition of the group. In addition, ¥962 million of the above borrowings, including ¥105 million repayable within 1 year, are subject to the following additional financial covenant: from the fiscal year ending March 2023 onward, at each consolidated fiscal year-end, maintain the consolidated ratio of total interest-bearing debt less cash and deposits to operating income plus depreciation at less than 8 times.」
Against the backdrop of a substantial ordinary loss, the risk that a covenant breach could result in the loss of the benefit of time for repayment was additionally highlighted. A new condition requiring the consolidated ratio to remain below 8 times from the fiscal year ending March 2023 onward was also disclosed. The filing does not state that a breach had occurred. - FY2022-Q2MitigatedAnnual report
「Following discussions with the lending financial institutions, the company entered into an agreement amending the financial covenants for the loan commitment agreement and certain long-term borrowings on 29 October 2021 during the current consolidated fiscal year. Discussions regarding certain other long-term borrowings are still under way, but an amendment agreement is scheduled to be executed during November 2021. The company believes that the possibility of breaching the financial covenants at the end of the current consolidated fiscal year will thereby be eliminated.」
Following discussions with the financial institutions, the company entered into amendment agreements for some of the financial covenants and plans to enter into amendment agreements for the remaining covenants. It therefore believes that the possibility of a breach at the end of the current fiscal year will be eliminated. - FY2022-Q1RestatedAnnual report
「The ¥10,550 million loan commitment agreement, including ¥3,500 million drawn, and ¥1,956 million of long-term borrowings, including ¥365 million repayable within 1 year, are subject to the following financial covenants. At each consolidated fiscal year-end, maintain total equity in the consolidated balance sheet at not less than 75% of total equity at the end of the fiscal year ended March 2021. In addition, from the fiscal year ending March 2023 onward, maintain it at not less than 75% of total equity at the end of the immediately preceding consolidated fiscal year. Do not record an ordinary loss for 2 consecutive consolidated fiscal years in the consolidated statement of income.」
The financial covenant terms have not materially changed from those disclosed in the previous fiscal year, while the balance of the borrowings subject to the covenants has been updated. - FY2021WorsenedAnnual report
「The ¥10,550 million loan commitment agreement, including ¥4,400 million drawn, and ¥2,047 million of long-term borrowings, including ¥365 million repayable within 1 year, are subject to the following financial covenants.」
The commitment agreement and borrowings subject to financial covenants have been specified, and conditions requiring equity to be maintained at 75% or more and the avoidance of ordinary losses for 2 consecutive fiscal years have been disclosed. - FY2021-Q3WorsenedAnnual report
「As there are concerns that the 75% equity covenants described in ② and ③ above may be breached, we are discussing with the financial institutions a change in the terms of both equity covenants to 60%.」
Concerns have arisen regarding a possible breach of the 75% equity covenant, and the company is discussing a change to 60% with the financial institutions. The filing does not state that a financial covenant breach had occurred. - FY2021-Q2First statedAnnual report
「Maintain total equity in the consolidated balance sheet at not less than 75% of total equity in the previous fiscal year. Do not record an ordinary loss for 2 consecutive fiscal years in the consolidated statement of income.」
The long-term borrowings and loan commitment agreement contain financial covenants requiring equity to be maintained at 75% or more and requiring the avoidance of ordinary losses for 2 consecutive fiscal years. The filing does not state that a covenant breach had occurred as of the filing date.