Corporate zombies add 24% in Korea over Covid-19 period to second largest ratio after HK

[Photo by MK DB]

Corporate zombies who cannot pay interests on debt from earnings in South Korea added 24% to 2,823 versus 2019 before the Covid-19 crisis, according to a joint study by Korea Economic Research Institute and Incheon National University professor Kim Yoon-kyung. Employees at marginal firm with an interest coverage ratio of less than 1 for three consecutive years still increased 314,000 from 247,000 over the period. The number of so-called zombie SMEs grew 25.4%, more than 15.4% of bigger firms. Zombie firms accounted for 17.1% of all listed companies in Korea, the second largest after Hong Kong (28.9%) among major economies.

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