2007 Financial Crisis
Indications of an impending financial crisis stemmed from a rapid increase in refund claims that total nearly 5,000,000,000 yen nationwide. A 21 August 2007, article in the Toyo Keizai, Nova was described as repeatedly delaying payment to business partners and banks, falling into arrears for printing costs at the end of July, asking an ad agency to defer a payment. Nova's 2007 first quarter financials showed a loss of 4,300,000,000 yen, a 19% decrease in sales compared to the previous year period, and an overall 19% decrease in recurring profit. Nova cited the decrease in the number of students and deterioration of its image as an explanation. The Asahi Shimbun reported on 11 September 2007, that Nova had made a request to an asset management consulting company, requiring them to return an outstanding amount of 8 million shares that were loaned to them on 30 July 2007. Nova had previously used the asset management consulting company to arrange short term financing with an 11 million share stock loan on 29 July 2007. BNP Paribas had obtained the 8 million shares from a third party on 30 July selling them on 4 September. Commenting on its temporary possession of Nova shares, BNP said it had been the result of the asset management consulting company exercising its option.
Read more about this topic: Nova (eikaiwa)
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