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Companies revisit loan contracts to seek concessions as covid-19 hits earnings

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MUMBAI: Indian corporates are revisiting their loan contracts and seeking concessions on repayment timelines and financial covenants from lenders as covid-19 outbreak and the ensuing suspension of production due to the lockdown have led to sharp erosion in consumer demand and ravaged earnings.

The financial hit is being felt across sectors, as evident in a survey of 300 firms conducted in May by the Confederation of Indian Industry, which said 65% expected a nearly 40% drop in revenue in the April-June quarter.

Such a steep fall in topline will constrain the ability of companies to maintain financial parameters promised to their lenders.

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