Toyo Keizai Article: Is Nova Running Out of Money?

This week's edition of the Toyo Keizai, a business mag along the lines of Forbes or Business Week, has an article that savages Nova portraying it as being run by a man constantly pulling tricks out of his hat to keep the company limping along. It doesn't get any worse than this. Here's a translation of the article.

The end of the road for Nova's business practices as cash flow crunch intensifies

With METI sanction and repeated missed payments, Nova stands at a precipice

Rumors of cash flow problems at Nova, the largest English conversation school in Japan, are coming to light. The August 14 announcement of the allocation of new shares to a third party was for a mere 10 million yen. The spokesperson for a venture business within the TEPCO group that has become a business partner of Nova explains: "We had been talking about working together, but they put forward the idea of increasing capital at the beginning of August." With Nova chasing after such an exceptionally small amount of capital, is it running short of funds?

According to a credit research company, Nova has repeatedly delayed payment to business partners. In addition to its regular repayments to bank(s) having been stopped, Nova had fallen into arrears for printing costs at the end of July, and asked an ad agency to defer a payment due on August 10th. The July salaries for Nova staff were also paid late. Salaries for the foreigner instructors, the lifeblood of the company, are paid on the 15th of each month. There were fears that Nova might not make it past August, but a 750 million yen private placement bond issue on the 7th bought some breathing room.

Sharp decline in new students

Nova's cash flow problems are a result of the collapse of its "bicycle business model." While Nova quickly grew to nearly one thousand schools, it's primary source of capital came from its students paying lesson fees up front. This money was pumped into opening new schools which in turn collected more money, which was then put towards opening yet more schools. Lather. Rinse. Repeat.

But the Ministry of Economy, Trade and Industry threw a wrench into the works when it ordered the partial suspension of Nova's business in June. The number of new students decreased and the paying out refunds to students who canceled their contracts began to eat into the flow of cash. Under an accounting item labeled "Deferred ekimae ryuugaku service income," the total prepayments owed as of the end of March last year was 31.6 billion yen, but dropped 6 billion yen over the ensuing year indicating that banks have cut off funding.

The president of Nova, Nozomu Sahashi, is a well-known for his intense personality. One venture businessman spoke of a marathon meeting that started at three in the afternoon and lasted until five the next morning. This is in contrast to a uniquely opaque way of doing business and transactions with affiliated companies that sell videophone systems for Nova's ochanoma ryuugaku.

Nova's only hope at the moment is Sahashi himself. In the previous fiscal year, he received 400 million yen in capital funding from Nova Kikaku. He used some of his shares in July as collateral to drum up capital from small and medium-sized brokerages. What will he pull out of his hat for his next trick?

Original article

強まる資金繰り不安説 袋小路のNOVA商法

経済産業省から業務停止命令を受けたNOVA。7月来、再三の支払い遅延を起こし、窮地に陥っている。(『週刊東洋経済』8月25日号より)

英会話教室最大手のNOVAに資金繰り不安説がささやかれている。14日に発表した第三者割当増資の調達額はわずか1000万円。引受先となった東京電力の社内ベンチャーは「提携について以前から協議していたが、増資の話は8月に入ってから持ち出された」と打ち明ける。なりふり構わず異例の少額増資に走るほど、懐具合は窮しているのか。

信用調査会社によると、実際にNOVAは取引先に対して再三の支払い遅延を起こしている。銀行への約定返済がストップしたほか、7月末には印刷関連の支払いが滞り、広告代理店に対しては8月10日の支払いについて猶予を要請した。従業員への給料も7月分は遅配となった。生命線である外国人講師への給料支払いは毎月15日。8月は乗り切れるか危ぶまれたが、7日に私募債7億5000万円を発行して一息ついた。

新規生徒が急減

資金繰りが逼迫したのは独自の“自転車操業モデル”が瓦解したためだ。同社は全国1000カ所近くまで教室を急拡大してきたが、その資金源は主に生徒から前払いで徴収した受講料だった。生徒募集でかき集めた前払金を拠点開設に投じ、さらなる生徒募集を行い、さらに……。これこそがNOVA商法の核心だ。

ところが、今年6月に経済産業省から一部業務停止命令を受け、その歯車は逆転した。新規生徒が減少、中途解約者への返金がかさみ始めたのだ。「繰延駅前留学サービス収入」との科目で負債計上された前払金は昨年3月末に316億円にも上ったが、1年間で60億円も縮小した。これは銀行から融資の引き揚げに遭っているのと等しい。

オーナーの猿橋望社長は強烈な個性で有名だ。あるベンチャー経営者は「午後3時から翌朝5時までお茶もなしにぶっ通しで会議をした」と逸話を語る。一方で「お茶の間留学」向けテレビ会話システムを販売するファミリー企業との取引など、オーナー経営特有の不透明な体質も残る。

今のNOVAにとって頼みの綱は猿橋社長その人だ。ファミリー企業のノヴァ企画からは昨年度に4億円の資金融通を受けた。猿橋社長は7月下旬、資金作りのため持ち株の一部を都内の中小証券に差し入れてもいる。どこまで粘り腰を見せられるか、だ。

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Comments

Ooooo, couldn't have

Ooooo, couldn't have happened to a nicer bunch of bastards. I hope (specifically) that sack-of-potatoes-lookin' Yvonne Brown, Flemming Lord and their 'uppers' end up eating sh*t out of their hats and getting drummed out of the country. They deserve worse for lying and cheating and making the 'Japan Experience' crappy for thousands of good-hearted people (who all paid their own way to get here only to get totally exploited) over the last several years. They've set the downward-spiraling tone for too long! So happy to see Karma finally catching up with them! As the dust after Nova settles, perhaps the language market in Japan will return to a fair balance of time and experience for money earned. All teachers who do private lessons: Don't sell us all short for less than 3,000 yen per hour!

I dont understand

how people keep on hooraying the fact nova might go under. Yes, I agree whole heartily that upper mgmt are a bunch of assholes, however stop to think about the teachers who are used to do the dirty work. Many of them dont understand what is going on and are probably scared shitless about the immediate future. The are the people who have done nothing wrong yet will get most of the shaft. Remember its not their fault but that of management.

RE: Ooooo, couldn't have

Yeah, good luck getting 3000 yen per hour when 4000 ex-Nova teachers saturate the market. Still rooting for the company's downfall?

So true

I busted a gut for his company, did my best abd was so pissed at the attitude of the thanks for the free visa arseholes who walke din, gave shitty lessona nd walked out. OK, sure, management sucks, the majority of teachers are here on good faith and trying to do the right thing by the students, but shit, how much can a guy take? Cut and run? Hold out to the end? IM MARRIED HERE! I GOT A LIFE!!! This is no six month holiday for me!

i sincerely hope the company

i sincerely hope the company can find a way through this mess. in the case of the poster above, there are those entangled herein who deserve hope and much more for their endeavours and committment to not only the students, but also the staff in their branches. the human cost is unquantifiable, sure the upper echelons are certainly responsible for mismanagement at best, and in an ideal world i would like to see some kind of justice brought to bear upon them, but before such i want the human face of nova to be given its due - for teachers, branch staff and students to be treated as a human resource and not a material one. the lies and deceipts are just too much to forgive.

i'm also married, have two children and have spent the last nine years with nova during which time i've seen the notion of common decency become progressively marginalised within the system. i don't play games - the thing that kept me there so long was a genuine rapport with those i dealt with on a daily basis, a circumstance that existed despite the the 'grand scheme of things', and the reason i would say companies such as nova have been able to capitalise thus far. but such 'leeching' has a limit and we are now coming face to face with it, in recent months i'd become increasingly ashamed of my employer and sought a way to prise myself from the unpleasant trough of its existence. happily i could do so and now feel a huge weight lifted from me. alas i know my steps will not aid those still embroiled in this fiasco, and i feel a genuine regret at leaving behind some very close associates - students, teachers and staff alike, but i've got a family to consider (not to mention my own dignity) and must act accordingly. since 'escaping' i've slept better than i have in a long time, but to those still dependent on nova i sincerely hope you will be treated with due consideration and given what is your right. in short, and melodramatic as it may sound, my thoughts are with you - i for one am not rejoicing at this loss.

best of luck.

THANK YOU

Thank you! I'm in a similar situation and I totally know where you're coming from. It's all these "thanks for the free visa" assholes that are now "protesting" by calling in sick. Guess what that does, guys? Does it make crazy Nozom What-his-face care? Nah, no one can even get ahold of that crazy mofo. So who's life is it making more difficult? The students, the staff, and your co-workers. So from one of the instructor's who's doing his best to make things work..... just go to work. You'll be paid on Tuesday.

Where do I go from here??

Unfortunately, after reading all of the comments listed on this site, I am sad to say that it appears my dreams of teaching english in Japan have just been astoundingly shattered in a matter of a couple of minutes. I have not yet worked for NOVA but I am due to leave Australia in early November to begin my teaching position with them. It is extremely bizarre to hear so many individuals conflicting opinions about the company. I had absolutely no idea that NOVA has been in so much trouble both financially and, what appears to be, morally for such a prolonged period of time. The people I know that have previously worked for the company have had nothing but praise for it and I guess I am now at a crossroads trying to decide who to believe. I guess I will just have to take solace in the fact that whether or not NOVA does go bust there will always be people who will want to learn English.

I completely concur with the

I completely concur with the previous post. I too turned up to work every day for a number of years and never gave less than 100% to my students. Alas, that never seemed good enough for the company. My AAM - who, I believe, has since returned to her home country - seemed to be intent on destroying the goodwill of the branches. Indeed, it was even remarked at one time that more experienced - "better"(?)- teachers were a hindrance to the company because they got paid more. In effect, they wanted "rid of them." If - and this is a big IF - Nova does somehow pull something out of the bag, it really needs to alter the attitude it has to its customers, its instructors and its staff. A bit of respect works wonders all around. If they'd exercised a bit of that earlier on they wouldn't be in the dire straits they're in now.

If this miracle does happen, then I hope those in upper management are turfed out onto the streets.

To all of the instructors - sorry, "teachers" - still with the company: Good luck to you all.

boo hoo

first of all people who work for nova are not teachers, yappin away about politics and teaching b46 or e 35 over and over again does not qualify you as a teacher, nova is well paid unskilled work, youll be better off suckin it up and getting new skills or going home and face the realities of what real work is.

whats was your major and how

whats was your major and how long long have you been teaching/working/vacuuming money in Japan for doing nothing? were you fired, abused by (not as I know what a preposition is) a child or a newbie with your instructor number in the 3000s? it's all all over the wall! go home if you don't like it. have you ever thought of that?

apologies

typo
what was your major?
BTW Nova is whatever you make of it. If you are a teacher then the materials are there for you. If you're not a teacher then your complaints date back to the 80s. If you are not satisfied maybe there is something else you could be doing. If you love teaching regardless of what materials are used its quite possible to use anything to suit the students needs. i apologize for for my last entry. i have been teaching for 8 years. i am a teacher. its not the text but your imagination and what you bring to it make it worthwhile to the students. i hope you can enjoy students faces light up when they get something they didn't get before because of your explanation. my last response was rushed and stressed. please accept my apology. try adding your own flavor to the lesson. pinpoint whats really being focused on and apply it other social arenas. the lessons are not restricted to what is on the page. you might find it much more rewarding if you personalize it and make it interesting for you and the student. good luck.

I truly hope that the

I truly hope that the instructors come out of this with their pay in their hands, and manage to move on.

As far as Mr F Lord goes (as mentioned in the previous posting), I wish him all the ill will in the world. As a fellow gaijin who has been part of many of the injustices that Nova has perpetrated, he deserves to take some of his own medicine. "B-b-b-ut I was only f-f-f-ollowing orders. Honest I was." Yeah, right.

If you see a tall miserable guy sitting at the end of a bar on his lonesome, it could just be him.

Bye bye Mr Lord.

Just to give you a heads

Just to give you a heads up...some of the Nova 'teachers/instructors' actually are teachers. I was one of them...I was a 'real' teacher back home and went to Japan for a change of pace, and because I love to travel. Mind you, I had the common sense to get out of the company about 5 months after I got in about 2 years ago. But yeah...screw off, some of us are and were 'real teachers. Yes, the majority of teachers are pretty much unskilled workers, but that makes training those 'teachers' so much easier for the company. And it also makes them that much more naive.
I feel bad for all of the instructors who are stuck in Japan now. I hope to hell no one else is getting ready to jump on their flights for Japan to start work for Nova.

"doing nothing".....?? No

"doing nothing".....?? No doubt you put no effort into your job you lazy cunt. But don't assume the rest of us are like you. Maybe you should go home. It's losers like you that make the rest of us look bad. I'm sure your home country has bars you can frequent too.

I'm sure this is so old that

I'm sure this is so old that you'll never see it, however, I resent this blanketed stereotype. I may not be a traditional teacher, but I'm teaching these students what they want to learn, what they are paying for. They know what the criteria is going in, Nova may have tricked them out of their money but they know they are coming in to learn conversational English. Usually they visit the trifecta (geos, nova, aeon) before settling with Nova. Yeah, a lot of the "teachers" are twats, but so are a lot of humans in general, the thing you have to remember is that there are a lot of us, we're not all twats.

the people who used to work

the people who used to work for nova are not teachers, yappin away about politics and teaching b46 or e 35 over and over again does not qualify you as a teacher, nova is well paid unskilled work, you'll be better off sucking it up and getting new skills or going home and face the realities of what real work is.

mic check: you have no idea

mic check: you have no idea what you are talking about, why are you even bothering? I'm so sick of this notion of "real work"; i.e. "I don't have an education therefore I work harder than everyone else".

Mic Check

Sorry, but Mic Check is correct - eikaiwa is for losers, big time.

Eikaiwa is for losers...Im so

Eikaiwa is for losers...Im so sick of Eikaiwa drones coming on these boards and trying to justify their existence. GET OFF THESE BLOGS NOW YOU EIKAIWA MUPPETS. Leave this blog to people with real jobs.

Eikaiwa Muppet - Loser. END OF.

Never mind a Mic Check, How about a REALITY check?

Check the dates on the posts of the people you're arguing with - they're a year old - you're picking fights with people who've probably reached retirement age now, and have forgotten these threads exist, probably due to alzheimers.

Responding to a one year old post, on a dead thread doesn't look cool, no matter what your point is.

Have you tried sunglasses and brylcreem? Maybe you have a better chance with those?

Reality Check. Eikaiwa is for Losers. END OF

Who cares how old any argument is. The point still remains entirely valid and true, and that is, from any perspective (employee or customer), eikaiwa is for LOSERS, sorry assed LOSERS, big time, oh yeah, BIG TIME LOSERVILLE.

You know it, I know it, we all know it.

So, got back to your stupid glass cubicle, and enjoy your stupid little lessons, and shut the hell up.

END OF

End of guy

"END OF".....What?

End of? What the hell do ya think?

Dude, where have you been? End of, as in, like dude, case closed, like EL FINITO, like, no argument to be had, like dude, totally finalized, totally.

What planet you from Dude? Seriously.

Eikaiwa is for LOSERS, as in it is so totally LOSERVILLE, so, like, get out of here, where have you been dude?

Dude, eikaiwa is for losers, end of.

Dude....like, man, OK then,

Dude....like, man, OK then, dude...I, like, totally, understand now, dude.

Make Fun all you like dude

Dude, make fun all you like, but like, I'm telling you, the Japanese demand is for American English dude, yeah, American English, so dude, take a chill pill and get with the flow. Yo, dude, I know, it sux big time, like way big time dude, but that's the market.

But...

"Reality Check. Eikaiwa is for Losers. END OF"

Maybe, but they don't hold a candle to Internet chat groups, when it comes to attracting losers.

WELCOME!!!

Japanese demand is for American English

I say old boy !! I think that is awfully arrogant of you to suppose that the Japanese are only interested in your bastardised version of the Queens English . You chaps don't even know the difference between an adjective and an adverb . Q " How's your coffee uncle Sam? " A " It's REAL good "

um, I don't know which

um, I don't know which Americans say that but none of the educated American's I know would say "It's real good." That grates on my brain. On the other hand... I'm amazed the British and other Queen's English speakers are able to understand much of anything with your use of words like "quite" and other strange and grammatically incorrect usages... Not that I think that American English is the only English Japanese want to learn. I know a lot of students who love Australian and British English.

A few pointers

Not even the Queen speaks the Queen's English anymore.

And there's no such thing as British English, and there never was. There is Oxford English, but it only exists in textbooks and the minds of a few arrogant, but unskilled English teachers. There is Scottish, Glasgow Scottish, Geordie, Yorkshire, Manchester, Lancashire, Scouse, Scouse Welsh, North Welsh, South Welsh, Bristol (Aaaaarrrrr), Brummie, Nottingham, West Country, East Anglian, London, and London Cockney, among many others, and these all have further geographical and generational variations too.

So, by the same token, what the F*** is American English? I'm betting it doesn't actually exist either

Have a nice day, Sirrrrrr

Whereas

Cockneys say "well good" (adjective + adjective)

Scousers say "Dead good" (adjective + adjective)

Tell them how to speak English, and it's probably gonna cost you a few teeth.

We can't really tell people how to speak English, because the language doesn't belong to us.

But it's fun to wind stupid people up, I agree.

Japanese want Standard Mid West American Accent (SMWAA)

It is a known fact that the Japanese preference is for their English to be dished up in a Standard Mid West American Accent (SMWAA). If given a choice of English on the menu, they will, with a 99% rate of consitency, order the Standard Mid West American Accent package.

It is a total fact.

English, New Zealanders, and Australians find this most annoying, because the Japanese preference rubs in their faces their economic insignificance (their brand of English simply isn't recognized as being the lingua franca, and can barely be understood).

Unfortunately for the male native speakers of inferior English (anything that is not SMWAA), Japanese women are also more sexually attracted to male SMWAA speakers.

Thanks

Thanks for that informative post. Even used credible stats to back up your unquestionable statements.

I reckon you're probably right tho. That explains a lot of things. I was wondering what the J-girls saw in the droves of opinionated, arrogant, balding, middle-aged seppos that were hiding Japan (the only place on earth they could get a date). It's the accent. It all makes sense now...

Mid West Accent of Great Benefit

As a balding middle aged man, I concur that my use of SMWAA (Standard Mid West American Accent) has bought to me considerable pleasurable benefits, during my 12 years as a professional Eikaiwa teacher in Japan. Originally from Ireland, the gradual adoption of SMWAA as being the English I deliver and serve during my classes resulted in increased customer satisfaction, and additionally increased my satisfaction, both inside and outside of the classroom (in particularly, outside of the classroom). I now have reached such a high level of SMWAA fluency, I actually pass off as being American, to Americans. I have found that the use of SMWAA more than compensates for my hair loss. No need for those expensive hair transplants. My confidence has never been higher, thanks to SMWAA.

SMWAA

Are you British/Australian ? Are you a failure in Japan ? Do you find it hard to get J-girls ?

Try new SMWAA (Standard Mid West American Accent), as used by countless , opinionated, arrogant, obese ,american , lechers.

This simple and effective way of talking will change your life !!!

SMWAA is available from an eikaiwa co-worker near you , for the low low price of your self respect .

Nigel from London says " Since using SMWAA my life has been transformed , it's amazing !!! Thank you SMWAA".

Bruce from Sydney says " Before SMWAA I could never get laid , but since using SMWAA I've had to fight the girls off . i can't believe the difference it's made . I would recommend SMWAA it's just incredible !!!

So hurry !!! Don't delay , get SMWAA today and take advantage of our free offer of American spelling . That's right !!! start using SMWAA today and we'll give American spelling absolutely free!!!

SMWAA. Sounds Great !

Thanks for the handy information on SMWAA. Do you have any informaton where I can purchase the SMWAA package you refer to? My private lesson students are few and far between, and the ones that I have retained, are broadly dissatisfied. And yeah, I really need to get laid. Bring in on. It aint easy being fat and bald.

Any pointers you might have, to hook me up to a SMWAA package would be deeply appreciated.

Needful

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