WHAT IS A ZOMBIE COMPANY?
Zombie companies are businesses that, although generating cash, are unable to attract enough investment to start paying off their debts. After covering running costs, fixed costs (wages, rates, rent) they only have enough funds left to pay off the interest on their debts, but not the debt itself. They are still trading, and so half living, but not able to invest or grow to pay off their debts, which is why they are also considered half dead. Their ability to meet loan interest payments is dependent upon continuing low interest rates
Zombie firms are usually loss-making and have little hope of improvement. Therefore, they depend on banks to grant them another loan to survive, effectively putting them on never-ending life support.
Research from the Institute for Turnaround, the not-for-profit and leading membership body for turnaround and transformation professionals, estimates that there may be up to 100,000 zombie companies in operation in the UK.
If you have a client that may need help turning off their life support machine we would welcome a call from you. We offer initial advice without charge or obligation.
Possibly on this occasion liquidation may be the only answer but there can still be life after liquidation.
Call us on 0808 168 7540
