In the news – Full extent of Covid-19 damage will emerge after relief measures expire (Business Times)
Read on for the Business Times article on the impact of COVID-19 and DHC Capital’s viewpoints on the impact of the virus fallout on companies. We highlighted the time lag and that the full impact of COVID-19 will only emerge once the support measures run out. We elaborate how a liquidity problem turns into a solvency problem for companies when there is a permanent change to earnings and cash flow if business sentiment does not pick up and the risk of loan impairments as debt becomes unsustainable. We also highlight distressed M&A as a possible solution for struggling companies.