‘Zombie’ business numbers soar in East of England
- Credit: Archant
The number of ‘Zombie’ firms in the East of England soared last month, according to insolvency trade body R3.
The number of ‘Zombie’ businesses – or those unable to pay more than the interest on their debts – jumped from 11,000 in August 2013 to 18,000 last month, it said.
The figures are at their highest level since June 2012, when the number stood at 55,000.
But rather than a return of the ‘zombie phenomenon’, insolvency practitioners suspect that late payment and over-trading problems associated with economic recovery are behind the rise.
R3’s eastern region chairman Frank Brumby said: “Making the minimum payments on debts or renegotiating payment terms with creditors can free up some extra cash and buy some time, but these are not long-term solutions. Healthy cash flow is critical.”