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Bankruptcies in Spain reach record numbers in Q1 of 2013

Source: Reuters - Mon 8th Apr 2013
Bankruptcies in Spain reach record numbers in Q1 of 2013

A record number of Spanish companies went bust in Q1 of 2013 as companies remained under intense pressure from tight credit conditions and meager demand, a study showed on Monday.

The 2,564 firms filing for insolvency proceedings in first 3 months of 2013 was 10% up on the previous quarter and a 45% increase on the same period in 2012, the survey by credit rating agency Axesor said.

"Most Spanish businesses did not prepare for a crisis this big or this long, which could be a determining factor," said Javier Ramos-Juste, head of economic studies at Axesor.

Spain has been in its 2nd recession in 5 years for the past 18 months and unemployment is more than 25%.

A credit freeze, liquidity problems, late payments and poor risk management contributed to the record number of bankruptcies since Spain's insolvency law changed in 2004, Axesor said.

Almost 28,000 companies have filed for bankruptcy since Spain's economic crisis set in 5 years ago, Axesor estimates.

Banks have tightened lending after a property boom turned to bust in 2008 and face stricter regulation since Spain received a bailout of about 41 billion from international creditors last year.

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