Direct distributor enters insolvency proceedings with 25m-euro debt

Direct SRL, based in Arges county, one of the largest distributors on the construction materials market, entered insolvency proceedings in September, after accumulating around 25-30 million euros in debt, 80% of which to banks and leasing companies. The company, held by businessmen Cosmin and Bogdan Radulescu, felt a sales decline as early as in November 2008, with problems worsening this year, when its business will decline by 53% against last year, to 150 million RON (around 36 million euros, at an average exchange rate of 4.2 RON/EUR). “Our business in RON fell in 2009 to 47% of what it was last year, which made it impossible for us to pay our debts to banks and leasing companies, considering that the debt amounted to under 30% of the 2008 turnover,” Cosmin Radulescu, manager of Direct, told ZF. This is the second major insolvency on the market of construction materials distribution, after that of Delta Distribution in Bucharest, which started reorganisation proceedings at the beginning of the year.