The number of insolvencies among companies has dropped

The number of insolvencies among companies has dropped

The slight decline in the number of insolvent companies is temporary. In the following months, more and more companies may face liquidity problems.

During the first half of this year, 1141 bankruptcy and restructuring proceedings were initiated. This is 2.8 percent less than a year ago, according to an analysis by Coface. Grzegorz Sielewicz, Coface’s chief economist for Poland and Central Europe, explains that – contrary to this statistic – the liquidity situation of companies is deteriorating.  The decline in total insolvencies is the result of fewer proceedings in the form of simplified restructuring, which was introduced during the pandemic. From December 2021, it was replaced by a new out-of-court procedure for approval of an arrangement. At the same time, the National Register of Debtors was launched, but there were a number of technical problems with its operation. As a result, the number of arrangement day notices in the arrangement approval proceedings fell compared to the notices in the MSiG in the same period of the previous year, and amounted to 615 (compared to 795 in the first half of 2021). However, it may increase in the coming months.

At the same time, the number of court proceedings in the first half of the year was as much as 38 percent higher than a year ago, at 526 . The strongest growth was in proceedings for approval of an arrangement and sanction. However, this number may be the result of the inclusion in the statistics of requests for approval of an arrangement in simplified restructuring proceedings.

In the next six months, the number of insolvencies may increase due to an increasingly unfavorable macroeconomic environment for companies. We can already see a decline in orders, problems with the supply of parts and components, and cost pressures. Problems with timely payments and debt service are also growing.

Source: https://www.rp.pl/dane-gospodarcze/art36643411-chwilowy-spadek-upadlosci-firm-to-tylko-na-pozor-pozytywna-informacja

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