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23,665 companies filed for insolvency in 2012, 10 pc more than in 2011 and 20 pc more than in 2010, Coface says.
The Coface analysis done based on preliminary data obtained from the Insolvency Procedures Bulletin (BPI) at the beginning of January 2013 indicates that a number of 23,665 companies filed for insolvency in 2012, more by 10 per cent compared to 2011 (21,499 new insolvencies) and by 20% compared to 2010 (19,650 new insolvencies), a pres release says.
Coface Romania analysed individually, in 2012, a total of 30,484 companies with a total turnover of RON 557.032 M, representing 56% of the turnover of all active companies in Romania. Coface estimates the actual number of new insolvency procedures initiated in 2012 may vary between 25,000 and 25,000. The actual rise of insolvency cases compared to 2011 may vary between 17% and 18%.
‘A notable fact is that the erosion of company financial stability overlapped in 2012 with a slow-down of economy regeneration. 2012 was the first year after 2008 that recorded throughout a faster annual growth of insolvencies than the rise of registered companies.
In this new context, knowing the evolution of financial circumstances of one’s main business partners is no longer an option, but becomes imperiously necessary,’ said Iancu Guda, Business Information & Debt Collection Manager, Coface Romania.
Most bankruptcies in retail
For the third consecutive year, the first ten sectors with the highest number of insolvent companies are still the same, the only changes being the order in the standing, with variations of one, maximum two positions. If in 2010, retail had a number of insolvencies comparable to wholesale, in the last two years retail took the lad with a total of 2,512 insolvencies opened in the first nine months of the current year. Removing the sectors with notable deviations because of the base effect (positive or negative), the highest increase of new insolvencies opened in 2012 (compared to the previous year) was reported by retail (+62%), real estate transactions (+38%), hotels and restaurants (+48%), other services provided mainly to companies (+35%) and transport (+25%).
The only sectors that reported a decrease in the number of insolvencies in 2012 compared to 2011 were: post and telecom (-19%) and production and supply of electricity and heat, water and gas (-14%).
South-East – the most affected
The territorial distribution of insolvency cases in 2012 suffered some major changes compared to the previous year’s situation. The three most affected regions were the South-East, South and North-West, concentrating almost half of the total number of insolvencies reported during the analysed period and a two-digit year-on-year rise (+17%, +20%, +10%). The only regions where the number of insolvencies dropped in 2012 compared to 2011 were Bucharest (-9,44%) and the North-East (10,96%).
Comparing the dynamic of financial indicators of companies filing for insolvency last year with the one recorded in 2011, last year, insolvency affected companies with a higher degree of vulnerability, that had experienced external and internal shocks less significant compared to the previous years, according to Coface. Despite of that, the number of newly insolvent enterprises continues to go up.