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Borrowers approach banks to rework loan pacts as earnings fall

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Many companies are going back to lenders to review their loan deals as they fear violation of some financial covenants Companies in India are revisiting their loan contracts and seeking concessions from lenders on repayment timelines and financial covenants as they worry about a sharp erosion in earnings because of strict restrictions during the nationwide lockdown.

The financial impact is being felt across sectors, as evident in a survey conducted in May by Confederation of Indian Industry (CII) among 300 companies.

The survey, which was released on 2 May, showed that 65% of the companies expect revenues to decline nearly 40% in the June quarter.

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