“Keep a close eye on companies with over 20m-euro debts!”

Doru Lionachescu, managing partner of investment banking
adviser Capital Partners, says new spectacular insolvencies are
more likely than transactions, in the context where markets are not
showing signs of recovery, with many companies being overindebted.
“We have to look very carefully at companies with debts of over 20
million euros. Apart from top 10 companies, few can survive in the
context where annual interest rates and commissions costs amount to
around 10% per year. Strictly mathematically speaking a company
with 24 million euros in loans has around 200,000-euro monthly
costs with loans alone. How many of them do you think are able to
pay the rest of their costs in order to survive?,” asks
Lionachescu, who has worked for ING, Citibank, and Bancpost over
the years.
He says in the two years of crisis banks “bought time, hoping
to fill current gaps with future profits, but at some point this
chain will break, and some companies will have to go through
compulsory execution.”