COFACE: Bankruptcies up 44%

The number of local companies that were declared bankrupt increased 44% last year to 10,431, compared with the 7,240 firms registered in 2005, according to a study conducted by COFACE – a company specialising in risk management. The number of firms that filed for bankruptcy last year stood at 3,191, down by around 8% from 3,485 in 2005. Trade remains, as in previous years, the sector with the most bankruptcies, registering nearly 37% out of the 10,431 firms declaring bankruptcy, according to the same study. Retail is the top ranking sector in terms of companies experiencing difficulties (with 1,935 such cases), followed by wholesale trade and distribution (with 1,909 cases). Ranked bottom is the service sector, which experienced the smallest number of bankruptcies. Within this field, the safest sectors were IT, banking, postal services and telecommunications, energy and real estate, each seeing less than a 1% level of bankruptcy. “It is natural for the energy and telecom sectors to see a very small number of bankruptcies,” states Cristian Ionescu, general manager of COFACE Romania. According to Cristian Ionescu, the market of energy supply has no competition and the telecom market remains “well-consolidated,” whereas entering this market is very costly for potential new players. Bucharest ranks first among areas with the highest bankruptcies, with 1,931 companies, 18.5% of total bankruptcies, followed by the Southeast of the country, with 14.2%, while the West is the most stable witnessing just 8.8% cases of bankruptcy.