Is It Time to Kill Off UK’s Zombie Companies?
By: Catherine Boyle
Staff Writer, CNBC.com
"As any horror film buff knows, zombies are difficult to kill. And the zombie companies which are increasingly causing concern in the U.K. are also going to be tricky to get rid of.
Lurching around, staying alive because low interest rates mean that they can continue to pay off the interest on their debts, but not growing, some of these businesses may be better being lopped off like a rotting limb.
This is helped by the U.K.’s loose monetary policy, which means that its banks are able to roll existing loans rather than insist that the money is repaid.
There are close to 150,000 U.K. businesses which are just servicing their debts, rather than repaying the capital, according to insolvency body R3."
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