Monday, 23 May 2022

Concerns for the construction sector are high with time running out for financially distressed 'zombie companies' that have been propped up over the past two years by government stimulus, as well as banking, landlord and tax office moratoriums.

KordaMentha partner Craig Shepard is not expecting a wave of insolvencies but believes there will be an increase in insolvency numbers.

“There are a number of companies out there that will be materially impacted by rising interest rates. Some businesses are just not going to have the liquidity they need or want for the journey,” Shepard says.

“You can call them zombies or just call them companies that have only remained in existence as a result of all the support and the cushioning. When they are held to account they are likely to fold.”

Click here to read the full article by Sarah Danckert as published in the Age.