Zombie Company

A Zombie Company is a indebted cash generating company that after covering running costs and fixed costs can fulfil loan interest payment but not their corporate debt.

Context:
- It can be a drag on an economy because they keep assets tied up.
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Example(s):
- an American Zombie Company, such as: Delta Air Lines.
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See: Corporate Debt, Political Economy, Bailout, Altman-Z Score, Corporate Debt Bubble.

References

(Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Zombie_company Retrieved:2021-2-17.
- In political economy, a zombie company is a company that needs bailouts in order to operate, or an indebted company that is able to repay the interest on its debts but not repay the principal.

(Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Zombie_company#Description Retrieved:2021-2-17.
- Zombie companies are indebted businesses that, although generating cash, after covering running costs, fixed costs (wages, rates, rent) they only have enough funds to service the interest on their loans, but not the debt itself. As such, they generally depend on banks (creditors) for their continued existence, effectively putting them on never-ending life support.

https://www.pionline.com/economy/americas-zombie-companies-rack-14-trillion-debt
- QUOTE: ... Zombie companies get their nickname because of their tendency to limp along, unable to earn enough to dig out from under their obligations, but still with sufficient access to credit to roll over their debts. They're a drag on the economy because they keep assets tied up in companies that can't afford to invest and build their businesses.
  Of course, not every company that becomes a zombie is destined to stay one forever. There are plenty of comeback stories, from Boston Scientific to Sprint. Many firms that have seen earnings wiped out due to the coronavirus outbreak are likely to rebound once a vaccine allows the global economy to return to a more normal footing, and may ultimately not need all the debt they raised.
  Yet the sheer amount of borrowing undertaken by struggling corporations in recent months will almost certainly limit the capacity of some to make capital expenditures and adapt to shifting consumer habits ...