Press release: Decade’s biggest number of bankruptcies in 2009
The new panel research on bankruptcies in Estonia compiled by Krediidiinfo shows that the number of bankruptcies in 2009 became the highest in a decade. According to Krediidiinfo’s analysts, the growth trend will also continue this year, but at a much slower pace.
Last year, 1055 companies in Estonia were declared insolvent, which is the highest level of the past ten years – the number of bankruptcies went up by 632 companies i.e. 2.5 times compared to 2008. Every 133rd company went bankrupt, i.e. 0.75 per cent of all Estonian companies.
It is remarkable that the share of bankruptcies among companies with over 10 million in sales revenue went up significantly in 2009 – every third bankrupt company.
A typical company that goes bankrupt is one with sales revenue up to 10 million kroons and without equity capital working at a big loss. Almost half of the companies that went bankrupt in 2009 had tax arrears for more than a year before declaring insolvency. Krediidiinfo had rated the companies’ activity weak (C, B, BB).
Surprisingly, the regions with the highest level of bankruptcy in 2009 were Järva County and the island of Hiiumaa; followed by West- and East-Viru County, which have been the regions with the highest level of bankruptcies for years. The lowest level of bankruptcy is in Põlva County, where there were just seven cases of bankruptcy. The most bankruptcy-prone field of activity is construction, where every 55th company went bankrupt.
The sales revenue of the companies that went bankrupt prior to bankruptcy made up 3.5 billion kroons and the net loss made up 1.0 billion kroons. In total, 4073 people worked in these companies. In 2008, the bankrupt companies’ biggest creditors were banks, but in 2009, the main damaged parties were cooperation partners and suppliers.
Compared to other European countries, Estonia is in 8th place in scarcity of bankruptcies per 10 000 companies among 25 European countries. At the same time, the number of bankruptcies has gone up the quickest in Estonia over the past year – by 150%.