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AufschwungZombiefirmen suchen Europas wirtschaftliche Erholung heim

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Some banks in Italy have begun to tackle the problem, including by announcing plans to sell billions of dollars of bad loans within three years. Analysts at Morgan Stanley estimate it will take the country’s banks 10 years to reach the European average for nonperforming loans.

Banks restructured Stefanel’s debt even when the apparel maker’s financial problems worsened. The banks continued to collect interest, and some of the loans were repaid, but their decisions not to wipe the debt off their balance sheets meant the banks had less money for healthy firms.

Stefanel’s lenders included Banca Monte dei Paschi di Siena, where bad loans peaked at nearly $58 billion in 2016. The Italian government took over the bank earlier this year. The bank and Stefanel declined to comment.

As part of a new restructuring plan, two distressed-debt funds will get a 71% stake in Stefanel by year-end for about $13 million. Giuseppe Stefanel, the founder’s son and company’s largest shareholder, will wind up with a stake of about 16%, down from his previous 56%. Banks owed $125 million by Stefanel will see that decline to about $110 million.

Banks demanded that Mr. Stefanel give up control and step down as chief executive as a precondition for approving the turnaround plan, according to a person familiar with the matter. Mr. Stefanel will remain non-executive chairman and “have no control whatsoever,” the person said. Mr. Stefanel declined to comment.

The restructuring plan is a sliver of hope to residents of Ponte di Piave, the small town in northeastern Italy where Stefanel is based. “Everybody in Ponte has suffered, from the gas stations to mechanics, bars, restaurants and shops,” said Andrea Malisani, a cafe owner and former head of personnel for the company in the 1990s. “The backbone of this community’s economic and social life has been reduced to a tiny shell of itself.”

Efforts to change Europe’s insolvency laws and bankruptcy courts could eventually help flush out zombie firms, speed the resolution of banks’ nonperforming loans and put the money to better use, according to analysts. Despite attempts to establish chapter 11-style bankruptcy procedures in Europe, it lags behind the U.S. on efficiency of corporate restructuring and insolvency procedures.

Economists have warned that some recent efforts to encourage debt restructuring that would allow troubled European companies to return to health are instead contributing to the problem of too many zombies.

In Portugal, a program set up in 2012 by the government as part of the country’s bailout aimed to help heavily indebted companies reach agreements with creditors, avoid insolvency and free up money to invest and grow.

In practice, the revitalization program can discourage banks from pulling the plug on battered companies, said Antonio Samagaio, an accounting professor at ISEG-Lisbon School of Economics and Management. The reason: The program allows lenders to take fewer write-downs because debt that isn’t forgiven still is considered performing for accounting purposes.

Lisgráfica Impressão e Artes Gráficas SA, one of Portugal’s largest printers, entered the program in early 2013. Banks forgave 65% of the company’s debt and agreed to extend repayments. That helped Lisgráfica to keep most of its workers on the job.

Now, though, Lisgráfica is having trouble making its debt payments. The company’s revenue has been hurt by the advertising decline at newspaper and magazine clients. Lisgráfica’s losses are widening, and it got rid of 9% of its workforce last year.

Lisgráfica recently filed to take part in the program for troubled companies again. The company declined to comment.

Patricia Kowsmann contributed to this article.

Copyright The Wall Street Journal 2017