Risk of Loss of Benefit of Time from Breaching Financial Covenants
First written in FY2016. 1 of 7 entries say "Worsened", first in FY2020. Latest entry: FY2023.
- FY2023MitigatedAnnual report
「For the fiscal year ended 31 March 2023, there were no applicable matters.」
Following full repayment of the borrowings, references to borrowings subject to financial covenants and breaches of those covenants were removed. - FY2022Breach items and contractual terms updatedAnnual report
「Although the Company was in breach of the financial covenants in (a) and (b) above, it confirmed that the bank did not intend to exercise its right to accelerate the obligations.」
The Company disclosed that, under the special overdraft agreement with Sumitomo Mitsui Banking Corporation, it had breached not only the covenant requiring an interest coverage ratio above 1, but also the covenant prohibiting net losses for 2 consecutive fiscal years. It confirmed that the bank did not intend to exercise its right to accelerate the obligations. - FY2021MaterialisedAnnual report
「Although the Company was in breach of the above financial covenant in (a), it confirmed that the bank did not intend to exercise its right to accelerate the obligations.」
The interest coverage ratio under the special overdraft agreement with Sumitomo Mitsui Banking Corporation actually fell to 1 or below, triggering a covenant breach. At the same time, the Company confirmed that the bank did not intend to exercise its right to accelerate the obligations, and entered into an agreement dated 15 April 2021 to amend the covenants for the syndicated loan. - FY2020WorsenedAnnual report
「Of the borrowings for the fiscal year ended 31 March 2020, the syndicated loan agreement, with an outstanding balance of ¥28,162 million at fiscal year-end, was subject to financial covenants. If any of the provisions below is breached, notice through the agent at the request of the majority lenders will cause all contractual obligations to become immediately due and payable, requiring payment of the loan principal and interest.」
The syndicated loan balance was updated to ¥28,162 million, and the Company disclosed that additional financial covenants applied to the special overdraft agreement and revolving credit facility agreement. It stated that the prolonged COVID-19 pandemic had increased the likelihood of these risks materializing. - FY2018Loan balance subject to financial covenants updatedAnnual report
「Of the borrowings for the fiscal year ended 31 March 2018, the syndicated loan agreement, with an outstanding balance of ¥30,915 million at fiscal year-end, was subject to financial covenants. If any of the provisions below is breached, notice through the agent at the request of the majority lenders will cause all contractual obligations to become immediately due and payable, requiring payment of the loan principal and interest.」
The financial covenants remained unchanged, and the fiscal year-end balance of the relevant syndicated loan was updated to ¥30,915 million. - FY2017Updated financial covenants and borrowings outstandingAnnual report
「Of the borrowings for the fiscal year ended 31 March 2017, the syndicated loan agreement, with an outstanding balance of ¥32,291 million at fiscal year-end, was subject to financial covenants. If any of the provisions below is breached, notice through the agent at the request of the majority lenders will cause all contractual obligations to become immediately due and payable, requiring payment of the loan principal and interest.」
For the syndicated loan balance of ¥32,291 million following refinancing, the financial covenants required maintaining consolidated net assets of at least ¥8,506 million and avoiding operating losses for 2 consecutive fiscal years. - FY2016First statedAnnual report
「If any of the provisions below is breached, notice through the agent at the request of the majority lenders will cause all contractual obligations to become immediately due and payable, requiring payment of the loan principal and interest.」
The conditions require maintaining non-consolidated net assets of at least ¥8,619 million and consolidated net assets of at least ¥6,860 million, and avoiding operating losses for 2 consecutive fiscal years.