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Number of insolvencies rises 14% in 2008

The number of insolvent Hungarian companies rose about 14% in 2008 - at the same rate as in 2007 - to reach 4% of all companies, the Hungarian unit of French credit insurance company Coface told MTI.

Coface said the number of insolvent companies is likely to grow at a faster rate in 2009, as more companies are operating than the economy can support. Many of the companies that will be wound up are shell companies whose closure will not affect the economy, it added. Only 40,000 of the more than 1 million Hungarian companies are creditworthy, Coface said.

The most insolvency procedures in 2008 were against companies with annual revenue of under HUF 300 million. Almost three-fourths of Hungarian companies have annual revenue under HUF 20 million, Coface noted. About 26% of procedures in 2008 were against retailers and wholesalers and 17% were against building industry companies. (Világgazdaság)