Private Equity

Private equity could help British companies stuck with £36bn in toxic debt

The report suggests the government encourage buyout firms, insurers and pension funds to provide longer-term capital to struggling businesses in order to help them pay off debt they took on to survive past the pandemic

Lobby group TheCityUK has warned that up to £36bn in government-backed loans could turn toxic by next year, as companies impacted by the Covid-19 pandemic struggle to pay back the debt.

The Recapitalisation Group, a taskforce led by TheCityUK and accountancy firm EY, found that companies would be left with approximately £100bn of unsustainable loans by the end of March 2021 in an interim update published on 8 June. Of this, nearly a third has been provided by the government's coronavirus business interruption schemes.

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