A study by Coface Romania covering newly opened cases registered within the Bulletin of Insolvency Proceedings for January – June 2015 shows that during the first semester of this year 5,524 new insolvencies were registered, down by 57 percent over the same period of 2014 when 12,862 new insolvencies were opened.


However, despite the strong decrease in insolvency rates, the negative impact on economy was greater this year, mainly due to the fact that about 98 percent of insolvencies were filed for companies with a turnover below EUR 100,000.

The number of insolvency proceedings initiated in the first six months of the current year by companies with a turnover above EUR 1 million stood at 329, a level similar to 2014 figures.

At the same time, Romania continues to register insolvencies expressed at 1,000 active companies four times higher than the average registered at regional level, with 45 insolvencies per 1,000 active companies, holding the leading position from this point of view.

Thus, although the number of newly initiated insolvencies in the first half of the current year halved, the financial impact generated within the economy (estimated based on the value of debts not covered by assets) is 163 percent higher, and the social impact (estimated by the number of jobs that might be lost) is 9 percent higher.

When looking at sectoral distribution, manufacture of textile products, clothing and footwear ranked first, while constructions, HORECA, recreational, cultural and sports activities and metallurgy remain in top five sectors with the highest level of insolvencies reported to 1,000 active companies.

The territorial distribution of cases of insolvency in the first half of 2015 declined in all areas of the country, with the North West area registering the highest drop, by 52 percent and Bucharest falling by 49 percent.

The study by Coface also covered the most important motives that led to insolvency by analysing the detailed financial statements of the companies and found the most important mistakes made were defective working capitals, low quality of revenues, insufficient operational return for the cost of contracted debts, inefficient investments and a rate of investments lower than the financing cost of loans contracted in order to support such investments.

“By analysing the insolvencies evolution, we noticed an unprecedented paradox in Romania: although the number of insolvency proceedings opened in the first half of this year halved, compared to the same period of last year, the financial impact propagated within the economy is 163 percent higher and the number of jobs that might be lost is 9 percent higher. Thus, we can say that the record insolvencies decrease remains at a statistical level and has no connection with the evolution of private companies’ payment behaviour, given that the latter deteriorates. The value of the payment instruments not covered increased by 62 percent in the first half of the year, while their mean value is RON 132,000, almost ten times higher than the level registered before the crisis of RON 14,000, in 2008,” concluded Iancu Guda, services director and senior economist at Coface Romania.

The Coface Group, a credit insurance company employing 4,406 staff, posted a consolidated turnover of EUR 1.44 billion. Present directly or indirectly in 99 countries, it secures transactions of 40,000 companies in more than 200 countries. Each quarter, Coface publishes its assessments of country risk for 160 countries, based on its unique knowledge of companies’ payment behaviour and on the expertise of its 350 underwriters located close to clients and their debtors. In France, Coface manages export public guarantees on behalf of the French State.

Natalia Martian


Romania is a land of contrast. Business Review helps you make sense of Romania.

Is there something that puzzles you about our country? You might also be interested in this.