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Friday, 2 July 2010

Zombie Recruitment Firms cannot pay their debts

An increasing number of UK recruiters are now ‘zombie’ companies, according to Plimsoll Industry Analysis's latest report on the recruitment sector of 1,000 companies.

The analysis found 37 ‘zombie’ companies which have seen their performance deteriorate to such as extent that they now exist merely to pay off their debts and survive.

Some have debts of 96% of turnover. These are possibly candidates for a company voluntary arrangement solution.

Many will have high levels of secured debt that the banks are simply rolling over. Perhaps it is time for some of these debts to be written down as part of a formal restructure process.

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