Number of insolvent companies went up by 7.5 percent to 11,221 in the first half of 2010

The end of the first half of this year saw 11,221 companies which were in various stages of insolvency, which represents a 7.5 percent growth compared to the similar period of last year when there were 10,435 insolvency files, according to data released by Coface Romania.

The data takes into consideration companies that opened the insolvency procedure, companies under judicial reorganization, and companies where the bankruptcy procedure was closed for lack of assets.

Thus, in the case of 6,255 companies, the general insolvency procedure was under way, while 2,235 were undergoing a simplified insolvency procedure. Additionally, 2,717 had gone bankrupt and 14 were in the middle of judicial reorganization.

The same industries that proved to be menaced last year also topped the chart this year. These were in bulk commerce and retail commerce, constructions and transportation, which together represent 50 percent of the insolvency cases.

In spite of expectations that the first half of this year would improve, data show that this was a very difficult period as the economy is still in decline. Consumers’ confidence is at a low due to the augmentation of taxes, lower revenues, fear of dismissal, especially in the public sector, and restrictive loans, which triggered a decline in consumption.

Other sectors that were vulnerable to insolvency were the textile industry, metallurgic industry, real estate, leisure activities, cultural and sports activities.

Thus, in the first semester of this year, the turnover in the manufacturing industry decreased by 5.1 percent, compared to the similar period of last year while the number of bankruptcies increased by 37 percent.

In agriculture, the number of insolvency procedures rose from 372 to 537 in the first half of the year. However, agriculture is still an interesting sector for investors due to the declining price of land, the good quality of the soil and the availability of unexploited land.

The sectors where the occurrence of insolvency has been the lowest were health and social assistance, production and supply of electricity and heat, water and gas and the extraction industry. However, it is worth mentioning that access in these industries is very limited.