IOU Financial Inc. implemented cost-reduction and other initiatives due to the coronavirus pandemic.
For one, the company modified its underwriting standards to temporarily cease lending to industries and geographical areas strongly affected by the pandemic. IOU Financial, however, continues to originate loans and support businesses deemed essential by various governments.
With the duration of the current situation of the pandemic unknown and considering the uncertainty faced by the North American economy over the coming months, IOU Financial furloughed about 40% of its full-time employees and implemented a temporary 20% reduction in salary for all remaining employees.
IOU Financial also disclosed that more than two-thirds of the value of its convertible debenture holders have agreed to defer the payment of interest from the April 30 payment period to the June 30 payment period and capitalizing the accrued interest over the reprieve period to the principal amount of the debentures at the end of the reprieve period, in accordance to the terms of the trust indenture under which the debentures were issued.