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Number of insolvencies in Hungary rises 11% in Q1-Q3 2008

  About 15,200 Hungarian companies became insolvent in Q1-Q3 2008, up 11% from the same period a year earlier, according to figures compiled by the Hungarian unit of French credit insurance company Coface.

 

About 26% of insolvency procedures were in the trade sector and 17% were in the construction sector. The number of insolvencies was also disproportionately high in the tourism, real estate and automotive sectors.

Almost 7,100 companies were wound up in Q1-Q3, 10% more than in the same period a year earlier. The number of companies liquidated at the initiation of creditors rose 12% to 8,100. Just 12 companies asked for bankruptcy protection.

Hungary’s laws are such that business owners have little incentive to ask for bankruptcy protection. It is far easier to take the assets out of an insolvent company, wind up the company and place the assets into a new company.

The solvency procedures in the first nine months affected 2.98% of all registered companies, Coface figures show. The proportion of companies under liquidation or windup was the highest, 6.24% in security services, followed by a 5.26% ratio in the construction sector. The ratio was 4.17% in retail trade and 3.68% in the wholesale sector. (MTI-Eco)