Nidec's 600bn yen credit line expires on 6 November after an equity-test shortfall
Nidec's undrawn 600 billion yen bank line expires on 6 November. Its equity of 764.7 billion yen fell 185 billion short of the line's test. The planned suit against nine former executives rests on 27.6 billion yen of costs, leaving 243.4 billion yen of payouts outside it.
Nidec's 600 billion yen backup credit line expires on 6 November. Its securities report shows the line is split evenly between MUFG Bank and Sumitomo Mitsui Banking Corporation, and it is undrawn.
The line set one equity test, at 31 March 2026. Total equity had to stay at 75% of the restated March 2025 level of 1,266.7 billion yen, a floor of 950 billion yen. Equity was 764.7 billion yen, 185 billion short, and both banks have waived their right to demand repayment.
The lawsuit involves a smaller sum. Nidec decided on 27 October to sue nine former executives, including founder Shigenobu Nagamori. The finding behind it rests on 27.6 billion yen of costs. Buybacks and dividends of 243.4 billion yen that Nidec says exceeded the legal distributable amount sit outside it.
What the planned lawsuit covers
The company's release says Nidec will examine the compensation to be sought. It will file "as soon as the Company is ready to do so". Shares closed at 1,741 yen on the day, up 1.93%.
The 27.6 billion yen comes from the committee's report of 16 October, published in an English digest on 23 October. It is what Nidec bore from August 2025 to August 2026. That was 22.2 billion yen of investigation costs, 5.3 billion of audit costs and 91 million of penalties. The penalties were for breaching its Tokyo Stock Exchange listing agreement.
The committee found that directors and auditors breached their duties through two group wide programmes. They were the Asset Revitalization Project from November 2016 and the FY22 Structural Reform. The report describes a policy of permitting accounting treatment only as far as it helped reach the operating profit target.
In February and March 2025, it says, Nagamori refused to let Mitsuya Kishida book structural reform costs separately. He insisted that full year operating profit of 240 billion yen was mandatory. The committee left each person's share of damages to the court.
The defendants are six former directors and two former corporate auditors. The ninth is a former vice president, who was chief financial officer from May 2022 to March 2026. Nidec chose as counsel three lawyers who served on or assisted the committee.
The 27.6 billion yen is about a ninth of the 243.4 billion yen pool.
Nidec's investigation committee found 27.6 billion yen of costs, a shareholder suit seeks 28.7 billion yen, and buybacks and dividends above the legal distributable amount total 243.4 billion yen across the years ended March 2022 to March 2026.
View data
| Figure | Billions of yen |
|---|---|
| Investigation, audit and exchange penalty costs (committee finding) | 27.6 |
| Shareholder derivative suit filed 9 September | 28.7 |
| Buybacks and dividends above distributable amount, years ended March 2022 to March 2026 | 243.4 |
The distributions outside the committee's work
The committee left the pool out of its work. It said addressing the distributions would be difficult, because Nidec had not submitted amended securities reports for past years. Nidec says it will examine legal action after completing the correction of those statements.
The pool is set out in a 30 September notice. Buybacks in the year to March 2022 were 31.4 billion yen. Dividends and buybacks then ran at 94.0 billion yen, 41.2 billion, 53.8 billion and 23.0 billion over the next four years.
The digest adds that Nidec has had no distributable amount since the 2020 fiscal year.
A shareholder has already gone after part of the pool. A derivative suit filed on 9 September at the Kyoto District Court seeks 28.73 billion yen from Nagamori and Hiroshi Kobe. It targets share buybacks and the December 2022 interim dividend. That claim already covers 12% of the pool.
Shareholders have pressed the board for a year. They demanded that Nidec pursue its former officers on 27 March, 16 July, 5 August and 20 August. The 16 July demand targeted interim dividends and a buyback that Nidec had already reported in June 2023 as above the distributable amount. Each time Nidec said it would decide after the committee reported.
The filing deadline and credit downgrades
The Tokyo Stock Exchange put Nidec on special alert on 28 October 2025. R&I says the exchange's deadline for Nidec's written confirmation on its internal management system is 28 October 2026.
The auditors and rating agencies have already reacted. PwC Japan declined to give an opinion on the March 2026 statements and on internal control. R&I cut Nidec from AA minus to A plus on 2 October and put it on a rating monitor for a further downgrade.
JCR cut it two notches the same day, from AA to A plus. It continued its credit monitor with a negative direction. JCR is waiting for the audit opinion on the March 2026 securities report, which Nidec plans to refile by 28 October.
R&I puts the effect of the accounting corrections on net assets through March 2025 at about 470 billion yen.
JCR counts a net loss attributable to owners of 564.6 billion yen for the year to March 2026. Impairments were mainly 335.1 billion yen on home appliance, commercial and industrial products and 231.0 billion on automotive products. Special investigation costs added 30.5 billion.
Cash, debt and the credit-line renewal
Cash of 852 billion yen covers debt due within a year of 682 billion yen 1.25 times. The year to March 2026 brought an operating loss of 519 billion yen on 632 billion yen of impairments. The equity ratio fell from 42.5% to 25.6%.
R&I notes that most of the added losses involve no cash outflow and that Nidec has halted shareholder returns and acquisitions. Net interest bearing debt was about 260 billion yen at March 2026.
Nidec forecasts an operating profit of 200 billion yen for the current year. R&I notes that the forecast includes provision reversals. It says underlying earnings sit well below what it expected before the accounting problems surfaced.
The suit cannot settle the pool by itself. The committee left each person's share of damages to the court, and the distributions wait on corrected filings. The lenders' decision comes before the court's assessment.
Two dates decide that test. By 28 October Nidec is due to confirm its internal controls to the exchange. JCR expects the refiled March 2026 report by the same day. On 6 November the undrawn 600 billion yen line expires.
Cash of 852 billion yen already covers short term debt 1.25 times, so the line is backup liquidity. The renewal terms, not the lawsuit, will show first whether the banks accept the restated equity of 764.7 billion yen.