To a certain extent, the immediate measures a mangement may take or implement is industry specific (as some industries will be affected more than others). Some immediate measures the management may undertake are as follows:
– Create additional liquidity: India is a capital starved nation. The current Covid 19 issue has only exacerbated the need for additional capital and in a crisis/stressed environment, liquidity is paramount. Hence, approproate steps should be taken to ensure liquidity. This would help the businesses to conitnue as a going concern.
– Management should consider alternate options for performance of contract, as opposed to cancelling or suspending contracts. It is possible for counter parties to take shelter under a force majeure clause and not meet its contractual performance obligations on account of the outbreak of Covid 19. This is likely to put many players in the market on the backfoot. Hence, relevant measures should be put in place to ensure performance of contracts (to the extent possible).
– Where possible, depedning on the nature of the contract – parties should strive to perform contract obligations electronically. This may be done through various electronic and online options available in the market.
– Changing situation because of a partial lockdown – the supply of certain products and services is still not suspended. For example, the transport and logistics industry is still functioning. Companies should utilise this opportunity and make full use of the services available at this stage.
– Provide a safe working environment to its employees. In addition to regularly sanitizing the office space and screening employees, the management should extend support to its employees (such as encourage work from home, consider providing paid leave for those effected with Convid 19, work in shifts – particularly for manufacturing companies having factory outlets).