ES-CON JAPAN has signed a ¥17bn syndicated term loan to pay for its planned purchase of Kitahama Realty, which changed its name on 1 August 2026, and to refinance existing borrowings. The company's board approved the contract on 27 October 2026, according to its timely disclosure.
The loan
The facility is a syndicated term loan with a maturity of 31 October 2033. Drawdown is scheduled for 30 October 2026, the same day the company plans to complete the share acquisition. The interest rate is the Japanese Bankers Association one-month TIBOR plus 0.60%. The notice names one arranger and one joint arranger.
The company's extraordinary report describes the lenders as a syndicate arranged by a city bank, made up of a city bank and a trust bank, three institutions in all.
Collateral and covenants
The two documents describe the security differently. The extraordinary report lists work-in-progress real estate for sale, plus land and buildings, held by a consolidated subsidiary that is still planned. The timely disclosure says the security is a provisional mortgage registration on real estate held by the target company that corresponds to the borrowing.
The loan carries two financial covenants:
- Consolidated net assets at each fiscal year-end from March 2027 must stay at or above the higher of two figures: 75% of net assets at the end of March 2026, or 75% of net assets at the latest fiscal year-end.
- Consolidated ordinary profit or loss must not be a loss in two consecutive fiscal years.
Forecast
ES-CON JAPAN says the loan is already built into the full-year forecast it published on 24 April 2026, so the forecast is unchanged. The company had earlier disclosed the share purchase of the target company, which involves a corporate split, in a 19 March 2026 notice. Neither the notice nor the report states the purchase price or the share of the ¥17bn that goes to refinancing.