More than 100 companies listed on the Australian stock exchange are on the brink of collapse, a rise of 51 over the past six months alone, with a restructuring expert predicting the rise of “zombie” companies will continue.
“The rubber has to hit the road at some point when you think of the economic uncertainty that’s going on,” said KPMG head of turnaround and restructuring services Gayle Dickerson.“Zombie” companies tend to be close to defaulting, may have liabilities that exceed their market value, are breaching their covenants or are barely making profits. Not only are there more of them, but they’re bigger: the average market cap of these businesses has ticked up from $20 million to $24 million.
“If you’re already a company struggling and you’ve got another rate rise, you’ve got to service that debt,” Dickerson said. “One of the options might be to seek an alternative lender, and sometimes their interest rates can be even higher. So it can be a cycle.” “Not yet,” said Dickerson, who earmarked consumer discretionary retail and construction sectors as vulnerable in the months ahead. “Watch this space, I suspect that may shift.”
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
Canada Canada Latest News, Canada Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Rise in 'Zombie Companies' Threatens Australian EconomyData from KPMG reveals a concerning increase in 'zombie companies' in Australia, which are teetering on the edge of financial ruin. The number of publicly-listed companies in this category has risen by 51% in the past six months alone.
Source: newscomauHQ - 🏆 9. / 77 Read more »
Credit Opportunities Arise as Companies Refinance BorrowingsTom Cahill, the co-head of tactical investing at Morgan Stanley Investment Management, sees potential credit opportunities for investors as companies need to refinance their borrowings in a higher-interest rate environment. He highlights the normalization of interest rates and the impact on asset values, particularly in real estate.
Source: FinancialReview - 🏆 2. / 90 Read more »
How one of the 'bloke-iest' companies in Australia is smashing the gender pay gapIn early 2024, more than 4.6 million workers are about to find out how much less the company they work for pays female staff. Many companies are working now to fix the problem.
Source: abcnews - 🏆 5. / 83 Read more »
Companies Using Fear of Human Extinction to Push for AI RegulationTop AI expert warns that big tech companies are spreading the false idea that AI could lead to human extinction in order to promote heavy regulation and stifle competition in the AI market.
Source: FinancialReview - 🏆 2. / 90 Read more »
Companies set to pay employees working from home differentlyLaw firm Herbert Smith Freehills has found 37 per cent of Australian companies plan to pay employees differently if they choose to work from home, while 83 per cent expect their staff to spend more time in the office over the next two years.
Source: SkyNewsAust - 🏆 7. / 78 Read more »