The number of impact companies which entered into insolvency remained constant over the past three years in Romania, with a slight decrease from 184 firms in 2017 to 183 in 2018, according to an analysis by CITR, Romania’s leading insolvency firm.
At the same time, the total value of fixed assets of the insolvent impact companies in 2018 reached 809 million euros, the smallest threshold in the last five years and a 34.44 percent decrease compared to the previous year, CITR said.
The average value of fixed assets per insolvent impact company reached 4.4 million in 2018, down 34 percent from 2017 while the total turnover of these firms is down 55 percent, and almost 800 million less than the previous year.
The 183 insolvent impact companies in 2018 have 11,760 employees, 17.42 percent less than in 2017. The counties with the most impact insolvencies are: Bucharest and Ilfov were the counties with the most impact companies in insolvency (66.35 percent ), followed by Sibiu (9.5 percent), Cluj (8.4 percent), Bihor (7.4 percent), Constanta (7.4 percent), Brasov (6.3 percent).
“As predicted, the insolvency among the impact companies was relatively constant in 2018. However, the fact that last year the value of the fixed assets of the impact companies in insolvency dropped to the minimum threshold of the last five years shows that the size of the insolvency impact companies is smaller.
As insolvency practitioners, our first objective is to redress and save value in Romanian companies. Thus, in 2018, 41 percent of the CITR portfolio was made up of companies in various reorganization stages, while the national average is around 6 percent for the same year,” Vasile Godinca-Herlea, CITR CEO said in a statement.
Based on the fixed asset value criterion, the top ten companies hold 33 percent of the fixed assets of the insolvent impact companies, amounting to EUR 267 million, and 10 percent of the jobs (1,164).
The biggest impact on the insolvency market is also sustained in 2018 in the industrial sector, which accounts for 29 percent of the impact of insolvency (as in the previous year) and almost 30 precent of the fixed assets (242 million euros). At the same time, the industrial sector owns almost 23 percent of the total insolvency impact (149 million euros), down 8 precent compared to the previous year, and provides 4504 jobs.
At the level of industrial branches affected by insolvency, in 2018 the food industry ranks first, with 18 insolvency companies with a turnover of 62 million and 1740 employees, ahead of the chemical industry, ranking first in 2017 .
In 2018, 15 mid-sized companies went insolvent on a monthly basis. Out of all impact insolvencies, 119 were opened at the request of the borrowers, and 64 at the request of the creditors.
In terms of the Romanian entrepreneurial environment, in 2018, 135,532 new companies were set up, while 8304 went into insolvency, almost 9 percent less than the previous year.
Impact companies are companies with over 1 million euro assets, accounting for 3 percent of companies in the Romanian economy and account for about 65 percent of the national turnover and for 49 percent of Romania's employees, according to the CITR study.