Record numbers of firms call in receivers in first half of year

A lack of credit may explain why some seemingly viable companies end up going under

The most dramatic corporate failure in Spain this year has to be that of the multinational fish processing company Pescanova, whose former chairman, Manuel Fernández de Sousa, faces possible accounting fraud and insider trading charges. But the trauma extended itself to large swathes of the corporate sector, which record number of companies going into receivership.

According to figures released Wednesday by the National Statistics Institute (INE), the number of firms calling in the administrators totaled 5,069 in the first half of the year, the highest figure for the period since INE began compiling the current statistical series in 2004. The figure represented an increase of 22.5 percent over the same period in 2012.

Since the crisis broke in 2008, a total of 32,133 companies have gone into receivership. "The figures show the lack of preparedness of Spanish business for a crisis of unforeseen duration and depth," rating agency Axesor said.

Apart from the fact the domestic economy has been locked in a crisis that has so far lasted five years, with the country into its second recession in that period, Axesor also attributes the rise in the number of bankruptcies to problems of viable companies accessing credit. It refers to a "persistent lack of bank loans that is causing problems to efficient and viable companies."

The bankruptcy figures continue to show the fallout from the bursting of the real estate bubble. The INE said the number of companies connected to the construction sector calling in the receivers amounted to 1,365 in the first half, representing 26.9 percent of the total.

Large companies such as Pescanova with annual turnover of over 10 million euros accounted for only 233 of the total cases of receiverships. By contrast, 1,243 companies with annual turnover of under 250,000 euros asked for protection from creditors.

In its report on Spain issued last week, the IMF called on the government to introduce new measures to get credit flowing again to small- and medium-sized enterprises and improve insolvency proceedings. "The insolvency regime should be improved to [...] promote the early rescue of viable firms," it said.

Recomendaciones EL PAÍS