• The number of companies in imminent insolvency has reached 6,949, the highest level recorded since 2013
• In 2022, 41% of the impact companies had been postponing for 3 years the access to a restructuring measure, staying in the area of imminent insolvency
• 69% of the companies that were in difficulty in 2019 stayed in the same state at the beginning of 2023, failing to make the transition to the area of financeable companies

The number of companies in imminent insolvency has increased to the highest level registered since the first edition of CITR’s study on the impact companies first edition, in 2013, and reaches 6,949 companies in 2022, more than double as compared to the lowest level recorded in 2015 which stood at 3.069 of companies in imminent insolvency.

On the other hand, 83% of the national turnover is generated by 39,970 impact companies, with total assets worth over EUR 1 million. Of these, 43% are now restructurable companies or companies in imminent insolvency, according to the ninth edition of the study on impact companies, created by CITR, leader of the insolvency and restructuring market. At the same time, they are registering 84% of the total debts since the beginning of 2023.

“Romania has responded with resilience and ambition to the recent challenges, however, they were not without side effects. The capacity to adapt becomes even more important when the upcoming challenges will require new solutions and even, in some cases, the reinvention of the business model. After more than thirty years, the Romanian economy can and must start to learn from its own experience, to notice the cyclicity of certain processes and the specificity of turning points. The CITR study provides such a perspective, noting both the current moment, and how this year fits within a multiannual cycle,” said Paul-Dieter Cîrlănaru, CITR CEO.

The number of companies in the distress zone has increased by 18% as compared to the start of 2022.

“This year’s study shows, once again, that a large part of impact companies continues to face difficulties in 2023. Especially in the complicated economic context we find ourselves in, entrepreneurs should also pay attention to warning signals which can show a difficulty and take timely measures to prevent the aggravation of difficulties. In such cases, the treatment consists of restructuring solutions, and the effect will be a re-settlement of debts upon a sustainable scheme, and also a change in the way of doing business, providing the company with the premises of streamlining for a healthy evolution. For the business environment, preventing difficulties is a change for the better,” adds Ciprian Nacu, CITR Head of Restructuring.

By the number of companies in distress, the most affected industries were, at the end of 2022: constructions (2,036 companies), real estate transactions (1,254 companies), and trade (684 companies). By turnover, the most affected domains are: the energy sector (EUR 2.96 billion), the manufacturing industry (EUR 2.42 billion), and trade (EUR 2.17 billion).

Following the implementation in the national legislation of the European Directive in the area of prevention and restructuring, Romanian entrepreneurs can benefit from clear procedures, namely the restructuration agreement and the arrangement with creditors, where they are free to negotiate with creditors and suspend enforcements, and the companies’ creditors can receive a higher degree of debt recovery by calling upon these restructuring mechanisms from the very first signs of distress.

About the study on impact companies:

In 2013, CITR has brought the term “impact company” on the market, referring to companies whose assets exceed one million Euro, and studied the industries where they were active, their profit levels, their debt to assets ratio, and their collection rate. Leaning on its experience of over 22 years on the insolvency and restructuring market, the study aims to understand the dynamics of the business environment, as well as the discrepancies in the entrepreneurial environment.

These companies are relevant as they generate the largest part of the nation-wide reported turnover.  In 2022, they represented 83% of the economy.