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Analysis: There are 30,000 impact companies in Romania, of which 21,000 may be in difficulty in next 6 months
In Romania there are 30,000 impact companies, of which 70% (21,000) may be in difficulty in the next 6 months, according to a CITR analysis, which shows that accessing in time restructuring mechanisms may save 400,000 jobs from 12,000 impact companies in difficulty.
“After 6 months since the beginning of the pandemic, the business environment crossed a period of cautious optimism, a 10% drop of insolvencies was recorded, compared to the same period of last year, and the NPL level was 4.3%. At the same time, 14 billion lei of delayed taxes have been accumulated since March 2020, which means 1,3% of GDP, but the real pandemic effects on economy will be visible in the next 6 months,” the CITR analysis shows immobilized stock of 1 million euros.
“A stress test made by CITR, the leader of the insolvency market, with 20 years of experience in the field, shows that the number of impact companies in difficulty may grow from 51% (at the beginning of 2019) to 70% in case of a financial crisis. That means 21,000 companies could be in difficulty in the following period,” CITR shows.
On the other hand, the latest analysis made by CITR, part of Impetum Group, made on a sample of 150 impact companies shows that 57% of businesses in insolvency delayed by 3 years adopting a decision to access a restructuring measure which could save them. The delay led to the drop by 50% of the business figure, the debt increase by 30% and the loss of over 3,000 jobs.
Even in the case of companies which delayed only by one year, 24% of analyzed companies, effects on economy are alarming: there is a 5% drop of the business figure, a debt increase by 8-10% and the loss of 500 jobs. In their case, the cash flow dropped by 25% and operational profit losses went up to 5% of the business figure. However, companies which do not delay making a decision for more than a year , have the option to apply prevention measures or a reorganization plan which could increase their chances of recovering the whole business.
CITR is the insolvency market leader in Romania,with an experience of 20 years in the insolvency market and about 1,000 projects managed in time, CITR annually administers a patrimony of 1 billion euros and distributes over 100 million euros yearly to creditors in its mission to save the value of Romanian companies.
As of 2020, CITR is an Impetum Group company, the first Romanian group devoted to the mission of maximizing the business value in any stage of a company life.