Bankruptcies could surge by 20 percent this year, Coface says

Newsroom 25/01/2010 | 10:21

The amount of companies going out of business in 2010 could rise by 15 to 20 percent on last year, when Romania saw 19,000 such cases, according to Coface.

“The number of bankruptcies will continue to grow this year. Some of these will be transferred from 2009, because they haven’t been completed due to the judiciary strike. So there will be an increase in the first half of the year, after which we will see fewer bankruptcies in the second half,” said Cristian Ionescu, general manager of Coface for Romania, Bulgaria and Slovakia.

Many firms are on the brink of bankruptcy but haven’t declared it yet, while others are asking for insolvency to protect themselves from their creditors, said Ionescu.

The number of bankruptcies increased by 30 percent last year on 2008, according to data from Coface. The worst hit market segments this year will continue to be real estate, IT equipment distribution, the furniture industry, textiles, as well as transport and retail.

The lack of bank financing was one of the reasons for the slowdown in activity. Last year, around 75 percent of ongoing loan contracts saw more than 90 days’ delay in repayments, which was three times the figure registered in 2008. The number of people and companies with unpaid loans grew by 56 percent last year, to 700,000 people at the end of December last year.