The panel study of Estonian bankrupt companies conducted by Krediidiinfo shows that the number of such companies decreased sharply in 2011, following the rise in numbers that had been apparent for several years and had ceased in 2010. The number of Estonian companies declared insolvent was 623, which is 40% lower than in 2010. 

Last year, 623 companies in Estonia were declared insolvent, and this number is 406 companies (40%) lower than it was in 2010, when the decrease amounted to mere 25 companies (2.5%). 

Krediidiinfo’s analysts forecast that the decrease will continue, although at a slower pace. Thus it will take us at least a couple of years for the number of bankrupt companies to get back to the pre-recession level of 400 per year. 

Last year, one in 297 companies i.e. 0.39 per cent of all the companies in Estonia went bankrupt. The total return on sales of the bankrupt companies in the year before their bankruptcy was declared amounted to 22.7 billion kroons (i.e. 0.1% of the turnover of all Estonian companies), and their total losses amounted to 4.4 billion kroons. Banks and supplier were the largest creditors of the bankrupt companies. 

The number of bankruptcies per thousand companies decreased in all counties. The counties where the number of bankruptcies per thousand companies was higher than the average were Harju County and Hiiu County (4.5 and 4 bankruptcies per thousand companies respectively). 

The bankruptcy rate in the sector of accommodation and catering and the sector of construction was twice as high as the average value or higher, amounting to 9.9 and 7.6 per thousand companies respectively. The lowest bankruptcy rate was displayed by the sector of agriculture. 

The number of bankrupt companies in the Western Europe increased by an average of 0.3%, but the growth rate in Central and Eastern Europe constituted 6.1%. The largest growth in the number of bankrupt companies was in Bulgaria (114.3%), followed by Slovenia (32.4%), Greece (27.3%) and the Czech Republic (21.5%). The number of bankruptcies decreased the fastest in Latvia (66.8%) and Estonia (39.5%). 

A typical bankrupt company is a firm without equity capital operating with considerable losses, whose return on sales is lower than 0.5 million euros. More than three quarters of the bankrupt companies had been in tax arrears in the last year of operation, and a quarter had been in tax arrears for the whole of the year. Around 85 per cent of the bankrupt companies received a low rating (C, B, BB) from Krediidiinfo in the last year of their active operation.