The last wave of bankruptcies in 2009

Publish date: 26-08-2009
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Companies that managed to overcome the first wave of the crisis, but which were taken by surprise by the evolution of the economy, which confirms one of the gloomiest scenarios in terms of the volume of economic activity and the population's income, are now posing questions, such as: Will the bank reschedule my loan? Will my clients pay their invoices?

"A wave of bankruptcies, generated by the refusal of banks to refinance companies that have proven they are unable to bounce back, will come at the end of this year or the beginning of next year. Until now, these have rescheduled and restructured loans, but this cannot go on forever," said Arin Stanescu, the head of the employers association of liquidators, whose business in this year's first seven and a half months was similar to that posted for the whole of 2008.

Flamingo is one of the retail market leaders, after applying an aggressive entrepreneurial strategy, a strategic merger with Flanco, and intense financing of the company, including its listing on the stock exchange. The drop from this level was even harder. Stores began emptying, and then closing. The company's Manager, Dragos Simion, said that he took this chance with the company's shareholders, when the economy was growing, and that a conservative strategy would have been risky for the fate of the management team at a time when the entire market was expanding aggressively.

"First of all, the Romanian management must have a joint action, and put pressure on government policies at the macroeconomic level," Emilian Radu, Strategic Partner for PricewaterhouseCoopers Romania, said. Codrut Pascu, Managing Partner of Roland Berger, warns that companies with a high degree of indebtedness are most affected. "The difficulties in contracting new loans prevent the refinancing of existing ones, and higher interest rates put more pressure on companies," Pascu said.

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