A "Zombie Company" is a term used to describe a company that is barely able to service its debt and is only kept afloat by continuously taking on new debt or by receiving support from lenders. These companies are often referred to as "zombies" because they persist despite being unable to generate enough cash flow to cover their operating expenses and debt payments.Zombie companies can be found in many industries and can arise for a variety of reasons, including economic downturns, mismanagement, or shifts in the industry landscape. These companies often struggle to grow and compete effectively, and their survival often relies on continued access to credit or government support.The presence of zombie companies can have a negative impact on the overall economy, as they can divert resources away from more productive and growing companies. They can also contribute to increased debt levels, decreased competitiveness, and reduced economic growth.In some cases, zombie companies may eventually be acquired, liquidated, or go bankrupt. However, in some countries, zombie companies can persist for many years, often at the expense of the broader economy.In conclusion, a "zombie company" is a term used to describe a company that is barely able to service its debt and is only kept afloat by continuously taking on new debt or receiving support from lenders. The presence of zombie companies can have negative impacts on the overall economy and can divert resources away from more productive and growing companies.
