Asset Related Covenants
Are intended to ensure the maintenance of a minimum asset base by the borrowers. Included in this set of covenants are:
• Maintenance of working capital position in terms of a minimum current ratio.
• Restriction on creation of further charge on asset.
Liability Related Covenants
May, inter alia, include:
• Reduction in debt-equity ratio by issue of additional capital, and
• Prohibition on disposal of promoters shareholding.