Monday, September 24, 2007

Bankruptcy surges 50 percent in Romania

Bankruptcies in Romania surged 50 percent in the first six months this year, local Financial Weekly reported Monday.

More than 95 percent of the Romanian firms face delayed payments of debts from clients, the weekly cited Coface Romania's managing director Cristian Ionescu as saying.

According to several surveys, companies in Romania are eager to insure their tangible assets, such as properties and equipment, but they neglect to insure more volatile assets like the clients' debts, which account for about 40 percent of the overall current assets, said Ionescu, whose company is a credit insurer.

Nearly half of the total bankruptcies are resulted from other bankruptcies, such as bankruptcies of business partners, Ionescu said.

Coface Romania estimated that about 15,600 firms will go bankrupt in Romania this year, up 50 percent over 2006.

Last year, a total of 10,431 companies in Romania were registered as bankrupt, of which trade was the most risk-prone sector, accounting for 37 percent of the total bankruptcies, according to a survey conducted by Coface Romania in March.

Source: Xinhua

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