Coface: Over 7,200 new insolvency proceedings opened in Romania in 2024, 9.38% more YoY
<p>The latest study conducted by Coface Romania revealed that 7,274 new insolvency proceedings were opened in 2024, compared to 6,650 in 2023, marking a 9.38% increase. Among companies with a turnover above EUR 5 million, there was a 75% rise in insolvencies last year.</p>

<p>Denied payment instruments have increased both in value (+30%) and number (+17%) compared to 2023 but continue to remain below the levels recorded in 2019, Coface said.&nbsp;</p>

<p>The top 3 sectors in terms of the number of companies entering insolvency last year are wholesale and retail trade/repairs of motor vehicles and motorcycles (1,927), construction (1,510), and manufacturing (860). They retain a concentration of around 59% of the total number of insolvencies recorded in 2024.</p>

<p>“The year 2024 can be defined as a year of economic deceleration, marked by a large fiscal deficit and a moderate increase in insolvencies. Given the significant fiscal impact on the business environment, we can expect an increase in the risk of fiscal pressures, declining real consumption, as well as extended payment terms to suppliers, amplifying the risk of insolvency of vulnerable companies. In this context, companies must develop risk management strategies that can respond to the current market challenges,” said Alina Popa, Country Manager at Coface Romania.</p>

<p>Of the total number of companies entering insolvency in 2024, about 37% are companies with at least 10 years of activity (established before 2014). At the same time, companies entering insolvency in 2024 had total debts of about EUR 2.5 billion at the end of 2023.</p>

<p>According to the Coface report, over the past three years, there has been an annual increase of 23% in the number of insolvencies among companies with a turnover between EUR 0.5 million and EUR 5 million, respectively 35% in the case of companies with a turnover of more than EUR 5 million.&nbsp;</p>

<p>The 79 companies with a turnover of more than EUR 5 million in 2023 had a total turnover in the above-mentioned period of about EUR 1.24 billion, i.e., more than 54% of the revenue realized in 2023 by all the companies that went insolvent in 2024. According to the financial data, these companies had 10,142 employees, which is about 31% of the total number of employees of the insolvent companies.</p>

<p>“If at the end of 2024 the increase in the number of insolvencies was 9.38%, during the analyzed period there was a large variation in the increase in the number of insolvencies compared to the same period of 2023: between 17.16% at the end of August 2024 and 7.17% after the first 11 months of 2024,” stated Tiberiu Chesoi, Head of Claims Department at Coface Romania.</p>

<p>“We expect this trend to continue into 2025. With the new increases in taxes, duties, and excise duties, which will affect consumption and the cost of financing, we expect an increasing pressure on the business environment,” he added.&nbsp;</p>

<p>Most insolvencies opened in 2024 were registered in Bucharest (1,375) and the counties of Bihor (581), Cluj (529), and Timiș (424). Even though most insolvencies were opened in Bucharest, Bihor county recorded the highest number of insolvencies per 1,000 active companies. Six counties, along with Bucharest, account for 51% of the total number of insolvencies opened in 2024, up 2 pp versus the previous year.</p>

<p>According to the same report, out of the over 1.26 million legally active companies, about 690,000 had a turnover above RON 0 by the end of 2023. During 2024, 124,898 legal entities were registered (-15% vs 2023), of which 91,619 LLCs, down from previous years.&nbsp;</p>

<p>The number of deregistered companies in 2024 was 83,012, and this is the highest level in recent years, an increase of 17% compared to the previous year.</p>

<p><i>irina.marica@romania-insider.com</i></p>

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