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Press release: Bankruptcy level is still very high

15. Mar 2011

Already for the 11th time Krediidiinfo performs a study of bankruptcies in Estonia, which shows that in 2010 the number of bankruptcies remains at a very high level – 1 029 Estonian companies were declared insolvent. This is the second worst result in ten years. 

At the same time there is a slight decrease in the total number of bankruptcies. Compared with 2009 the number of bankrupt enterprises decreased by 26, i.e. by 2.5% (in 2009 the number of bankruptcies increased 2.5 times). Krediidiinfo analysts predict that this year the trend towards a decrease in the number of bankruptcies is to accelerate. 

The last year every 147th company went bankrupt, which makes for 0.68 percent of all companies operating in Estonia. The total sales income of bankrupt companies during their activity amounted to 12.3 billion kroons, and the net profit to 1.8 billion kroons. Banks were the most important creditors of bankrupt companies. 

A typical Estonian bankrupt company had its sales income below 10 million kroons, was working with large losses and did not have equity capital. 72% of bankrupt enterprises had long-term tax debts that appeared more than a year before the announcement of insolvency. Approximately 97% of bankrupt companies had a low Krediidiinfo rating (C, B, BB) during the period of their activity. 

The number of bankruptcies per thousand businesses declined in most counties, except for Valga, which had the most number of bankruptcies also in the early months of 2011. Harju and Tartu counties followed Valgamaa. The lowest level of bankruptcies was registered in Põlva, Jõgeva and Viljandi counties. 

Just like in other European Union countries hotels along with catering and construction companies become bankrupt most often (one out of 70 companies in this fields of business went bankrupt). The level of bankruptcies in these sectors was twice as high in comparison with others. 

When measuring the dynamics of decrease of bankruptcies in comparison with other European countries, Estonia holds the 9th place out of total 26. This is the best result in the Eastern Europe, and the same as in Germany. 

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