Wave of insolvencies could come next year
Next year, the number of insolvent companies may reach a record high. Simplified restructuring will help many entrepreneurs to come out on top.
The new version of the accelerated restructuring procedure has been in force since the first of December. The first one, which was introduced by the Anti-Crisis Shield 4.0, quickly became very popular. Coface data shows that in the first quarter of this year, more than 350 out of 515 insolvent entities opted for simplified restructuring. In the second quarter, the number of insolvencies reached 1175 and the number of simplified restructurings 795, while in the third quarter the number of such proceedings amounted to 1200 out of 1841 insolvent companies. Grzegorz Sielewicz, chief economist of Coface in Poland and Central Europe, says that 20-30% of simplified proceedings are successful.
According to experts, the number of restructurings will increase in the following months. It may even reach three thousand. Much depends on the fourth wave of the pandemic and related restrictions. In addition, entrepreneurs have to deal with inflation, which results in price increases and pressure on wages.
The companies most at risk of insolvency are those that have been hardest hit by the pandemic. These include the catering and hotel industry, but also entertainment, cosmetics and fitness.
Experts point out that not all companies with financial problems decide to restructure. Many of them do not do it at the right time.