NEWS » Corporate failures soar in Italy
Corporate failures soar in Italy
It’s a hard time for Italian companies. In the first quarter of 2013 bankruptcies in the Italian business have reached a new high of 3,500 procedures initiated, an increase of 12% over the same period of 2012. According to “Cerved” data the compositions with creditors grew by 76%.
On the whole, business closures have consistently increased: in the first three months, there are about 23 thousand companies that have initiated insolvency proceedings or voluntary liquidation, an increase of 7% over the same period of 2012. In addition to failures, in fact, closures continue to grow: 19 thousand companies with no previous bankruptcy proceedings have voluntarily decided to close. 5.8% more than last year.
According to the “Cerved”, a group specializing in the analysis of business models and assessment of credit risk, the most striking phenomenon, however, is the strong increase in the compositions with creditors, which recorded an increase of 76% on an annual basis, a boom that leads to 13% increase in insolvency proceedings other than failures.
The origin of this rise includes new rules with which the bankruptcy regulation has been reformed and, in particular, the introduction of the so-called “Concordato in bianco”, the opportunity to submit an application without the recovery plan and to block enforcement actions, even with retroactive effect. This aspect of the new regulation was much appreciated by the companies. Between the entry into force of the new rules in September 2012, and the 31st of March, it is estimated that there have been 2,700 instances, more than double that of the traditional compositions with creditors.
From the territorial point of view the first three months of 2013 marked a change in the trend of failures: the North East, where the number of defaults was in decline since mid-2011, reported a strong surge of procedures, an increase by almost a quarter compared to the first quarter of 2012 (+24%). The increase in bankruptcies, however, does not spare any area of the country: the race proceeds with double-digit rates in the North West (+15%) and slightly lower pace in Central Italy (+9%), South and Islands (+3 %).