Provision of Collateral and Funding Constraints Following Breaches of Financial Covenants
First written in FY2017. 6 of 20 entries say "Reframed", first in FY2020. Latest entry: FY2026-H1.
Sanyo Shokai moved to the "Worse" side of this theme in 2018, 4 years before the typical company in this theme (2022).
The whole theme swung hardest in 2025: 23 of 75 companies on the "Worse" side.
28 other companies' latest entry also says "Mitigated".
- FY2026-H1MitigatedAnnual report
「No applicable matters for the interim consolidated accounting period (31 August 2025).」
For the interim consolidated accounting period, the disclosure states that there were no applicable matters regarding the collateral assets securing ¥5.0 billion in borrowings from the transaction bank that had been reported in the previous consolidated fiscal year. The current disclosure no longer mentions the collateralization, but does not indicate that the borrowings themselves have been extinguished. - FY2025-Q1Decrease in borrowings secured by collateralAnnual report
「The assets listed below have been pledged as collateral, including revolving mortgages and revolving pledges, for ¥5.0 billion in borrowings from the transaction bank.」
Borrowings from the transaction bank subject to collateralization totaled ¥5.0 billion, down from ¥5.8 billion reported at the end of the previous consolidated fiscal year. The collateralization itself remains in place. - FY2024-Q3ReframedAnnual report
「The assets listed below have been pledged as collateral, including revolving mortgages and revolving pledges, for ¥5.8 billion in borrowings from the transaction bank.」
At the end of the third quarter, the disclosure describes cash, real estate and other assets pledged as collateral against ¥5.8 billion in borrowings, compared with the previously disclosed financing structure, which included an overdraft agreement. No new breach of financial covenants is disclosed. - FY2023MitigatedAnnual report
「To fund this, the Company raised ¥6.8 billion from financial institutions. Interest-bearing debt, including borrowings and lease liabilities, stood at ¥7.014 billion at the end of the current consolidated fiscal year. Cash and cash equivalents stood at ¥18.416 billion at the end of the current consolidated fiscal year.」
The disclosure states that ¥6.8 billion was raised from financial institutions, including through refinancing, and that cash and cash equivalents totaled ¥18.416 billion. The response to financing constraints arising from past breaches of financial covenants remains ongoing. - FY2023-Q3MitigatedAnnual report
「Under these circumstances, as of the end of November 2022, the company had completed the refinancing of ¥5 billion in borrowings whose repayment date had arrived with its principal financial institutions.」
The disclosure states that, as a response to financing constraints, the Company completed the refinancing with its main financial institutions of ¥5.0 billion in borrowings that had reached maturity. - FY2023-Q2ReframedAnnual report
「Second quarter of the current consolidated accounting period (31 August 2022): The assets listed below have been pledged as collateral, including revolving mortgages and revolving pledges, for loans from the transaction bank (¥800 million) and an overdraft agreement (overdraft limit: ¥5.0 billion). The outstanding balance under the overdraft agreement is ¥5.0 billion.」
The financing structure has changed from the previous composition of loans and overdrafts to a collateralized financing structure consisting of ¥800 million in borrowings, an overdraft limit of ¥5.0 billion and an outstanding overdraft balance of ¥5.0 billion. No new breach of financial covenants is disclosed. - FY2023-Q1MitigatedAnnual report
「Under these circumstances, as of the end of May 2022, the company had completed the refinancing of ¥800 million in long-term borrowings and ¥5 billion in short-term borrowings from financial institutions.」
Under the existing framework of collateralized loans and overdrafts, the Company completed the refinancing of ¥800 million in long-term borrowings and ¥5.0 billion in short-term borrowings, implementing its response on the financing front. - FY2022-Q2MitigatedAnnual report
「However, during the first quarter accounting period, in addition to the ¥2.8 billion in long-term borrowings due for repayment within one year, the Company completed the refinancing of ¥3.0 billion in short-term borrowings from financial institutions.」
The disclosure states that, in addition to the ¥2.8 billion in long-term borrowings due for repayment within one year, the Company completed the refinancing of ¥3.0 billion in short-term borrowings from financial institutions. The response to financing constraints has been implemented. - FY2022-Q1ReframedAnnual report
「The assets listed below have been pledged as collateral, including revolving mortgages and revolving pledges, for loans from the transaction bank (¥2.8 billion) and an overdraft agreement (overdraft limit: ¥4.0 billion). The outstanding balance under the overdraft agreement is ¥3.0 billion.」
This does not represent a new breach of financial covenants. It describes the current loan and overdraft agreements, including refinancing of short-term funds, and the collateralization of real estate, investment securities and other assets. The disclosure has been reorganized from one focused on responding to breaches to one describing the collateralized financing framework after refinancing. - FY2021MitigatedAnnual report
「No applicable matters for the fiscal year (28 February 2021).」
The current fiscal year section now states that there were no matters involving breaches of financial covenants, which had been reported previously. However, collateral has been pledged under new loan and overdraft agreements. - FY2021-Q3ReframedAnnual report
「The assets below have been pledged as collateral under a revolving mortgage and floating pledge for borrowings from relationship banks of ¥3,000 million and an overdraft agreement with a commitment amount of ¥4,000 million. The borrowings corresponding to the overdraft agreement were ¥3,000 million.」
With respect to the funding framework after repayment of the previous syndicated loan, the company disclosed borrowings from relationship banks of ¥3 billion, an overdraft agreement with a commitment amount of ¥4 billion, ¥3 billion drawn under that agreement, and ¥10,098 million of real estate, investment securities and other assets pledged as collateral. - FY2021-Q2ReframedAnnual report
「The company had drawn borrowings under a commitment line agreement, but repaid the borrowings below on 30 September 2020.」
In connection with the transfer of Sanyo Ginza Tower, the company repaid on 30 September the ¥10 billion commitment line borrowing drawn on 31 March 2020. The funding framework changed from repayment of the previous secured borrowings to a combination of asset sales and new borrowings secured by collateral. - FY2020ReframedAnnual report
「In March 2020, the company repaid ¥9 billion in borrowings under the syndicated loan agreement with 4 relationship banks. In addition, to secure working capital, the company reached agreements with the lenders in March 2020 on the borrowings below and drew the full amounts.」
The company repaid the previous ¥9 billion syndicated loan and drew all new borrowings and overdraft facilities from multiple financial institutions. At the same time, the new borrowings were also secured by real estate and investment securities, changing the funding framework to one combining financing with the provision of collateral. - FY2020-Q4RestatedAnnual report
「The company has pledged assets as collateral for a syndicated loan agreement with 4 relationship banks. The outstanding balance of borrowings under the syndicated loan was ¥9,000 million.」
The pledge of investment securities as collateral following the breach of the financial covenants and the ¥9 billion outstanding syndicated loan balance continue. - FY2020-Q2RestatedAnnual report
「The company has pledged assets as collateral for a syndicated loan agreement with 4 relationship banks. The outstanding balance of borrowings under the syndicated loan was ¥9,000 million. Investment securities: ¥7,429 million」
The company continues to disclose that investment securities are pledged as collateral following the breach of the financial covenants, and that the outstanding syndicated loan balance is ¥9,000 million. - FY2020-Q1MaterialisedAnnual report
「The company has entered into a syndicated loan agreement with 4 relationship banks. The agreement contains the financial covenants below, and because item ② was violated in the previous consolidated fiscal year, part of the investment securities held by the company, with a carrying amount of ¥8,263 million at the end of the current first-quarter consolidated accounting period, was pledged as collateral on 12 April 2019 in accordance with the agreement.」
Following the breach of the financial covenants in the previous year, the previously planned pledge of investment securities as collateral was executed on 12 April 2019. In addition, the outstanding balance of the syndicated loan drawn was ¥9 billion, meaning the full amount of the facility had been drawn. - FY2018WorsenedAnnual report
「As item ② was violated during the current consolidated fiscal year, part of the investment securities held by the company, with a carrying amount of ¥8,639 million at the end of the current consolidated fiscal year, is scheduled to be pledged as collateral in accordance with the agreement.」
In addition to the commitment line already secured by real estate collateral, the syndicated loan also breached a financial covenant requiring that no operating loss be recognized for fiscal 2018, and investment securities worth ¥8.639 billion are now scheduled to be pledged as collateral. - FY2019-Q2MaterialisedAnnual report
「As item ② was violated in the previous consolidated fiscal year, part of the real estate held by the company, with a carrying amount of ¥6,437 million at the end of the current second-quarter consolidated accounting period, has been pledged as collateral in accordance with the agreement.」
Following the breach of the financial covenant in the previous consolidated fiscal year, the disclosure changed from "scheduled to be pledged as collateral" to stating that real estate with a carrying amount of ¥6,437 million has actually been pledged as collateral. - FY2019-Q1RestatedAnnual report
「As item ② was violated in the previous consolidated fiscal year, part of the real estate held by the company, with a carrying amount of ¥6,455 million at the end of the current first-quarter consolidated accounting period, is scheduled to be pledged as collateral in accordance with the agreement.」
The company continues to disclose the breach of the financial covenant relating to ordinary losses in 2 consecutive periods and the planned pledge of real estate as collateral. The carrying amount of the collateralized real estate increased from ¥4.5 billion to ¥6.455 billion. - FY2017MaterialisedAnnual report
「As item ② was violated during the current consolidated fiscal year, part of the real estate held by the company, with a carrying amount of ¥6,490 million at the end of the current consolidated fiscal year, is scheduled to be pledged as collateral in accordance with the agreement.」
With respect to the long-term borrowings agreement and commitment line agreement, a financial covenant relating to ordinary losses in 2 consecutive periods was breached, and real estate with a carrying amount of ¥6.49 billion is scheduled to be pledged as collateral.