Why private equity is stuck with 'zombie companies' it can't sell

Private equity firms are facing a new reality: a growing crop of companies that can neither thrive nor die, lingering in portfolios like the undead. These so-called "zombie companies" refer to businesses that aren't growing, barely generate enough cash to service debt and are unable to attract buyers even at a discount. They are usually trapped on a fund's balance sheet beyond its expected holding period. "Now, as interest rates were rising, people felt they were stuck with businesses that were slightly worthless, but they couldn't really sell them … So you are in this awful situation where people throw around the word zombie companies," Oliver Haarmann, founding partner of private investment firm Searchlight Capital Partners, told CNBC's " Squawk Box Europe " on Tuesday. Haarmann added th