The demand for capitalism’s emergency surgeons is on the rise as stock markets continue to soar and the global economy remains surprisingly buoyant. Despite the positive economic outlook, the number of companies defaulting on their debts has increased significantly, with 159 companies defaulting last year, up from 92 the year before. This trend is concerning, as it indicates a potential downturn in the business landscape.
Well-established companies like Instant Brands and Yellow have already collapsed due to falling sales and rising interest rates. The situation is worsening, with 23 firms defaulting on their debts in the first two months of this year, compared to 19 in the same period last year. This has led to an increase in demand for restructuring and financial advisory services.
The rising number of corporate failures has not only vindicated the pessimistic forecasts but has also created opportunities for advisers specializing in restructuring distressed businesses. Investment bankers, consultants, and lawyers are all in high demand to negotiate with shareholders and creditors, reduce costs, and develop new business strategies for struggling companies. As a result, 2023 was one of the busiest years on record for these professionals, and 2024 is expected to be equally lucrative.
2024-03-21 09:14:59
Article from www.economist.com