More than 5,000 companies requested pre-bankruptcy settlements, 211 have been concluded

In almost a year of applying the provisions of the Law on Financial Operations and Pre-Bankruptcy Settlements, more than 5,000 companies with nearly 42,000 employees and over 48.6 billion kuna in reported debts have requested the initiation of a settlement, and so far a total of 211 pre-bankruptcy settlements have been concluded before commercial courts, according to data from the Financial Agency.

According to aggregated data from Fina, from October 1 of last year to September 20 of this year, 5,035 companies with 41,790 employees have requested pre-bankruptcy settlements.

Almost 89 percent of the total number of these companies are small companies, meaning those whose obligations reported in the pre-bankruptcy settlement process were less than 10 million kuna, totaling 4,477. However, the remaining 558 large companies, with debts exceeding 10 million kuna, account for as much as 91.3 percent of the total reported debts, or more than 44.4 billion kuna.

Of the total number of pre-bankruptcy settlement procedures initiated so far, Fina’s data shows that a total of 3,975 cases or 79 percent have been resolved, while 1,060 are still in progress.

So far, 857 cases or 17 percent of the total submitted requests have been positively resolved, meaning that a financial restructuring plan has been accepted for them or settlements have already been concluded.

Of this, a financial restructuring plan has been accepted for 646 companies, and 211 have concluded pre-bankruptcy settlements, which constitutes 4.2 percent of the total number of companies that submitted requests.

Thus, of the 48.6 billion kuna in total reported debts, 14.7 billion kuna has been ‘resolved’ so far – more than 12 billion kuna is the amount of debts for companies for which a restructuring plan has been accepted, and the concluded settlements relate to companies with nearly 2.7 billion kuna in obligations, or 5.5 percent of the total amount.

Fina’s data also shows that nearly one-third of all pre-bankruptcy settlements have been concluded before the Commercial Court in Osijek – 67 of them. This is followed by commercial courts in Varaždin (53 settlements), Rijeka (44), Zagreb (19), Bjelovar and Split (10 settlements each), and Zadar (8).

Fina has also published an overview of data on submitted proposals for initiating pre-bankruptcy settlement procedures by company activity, as well as territorial distribution.

According to this data, the largest number of companies that initiated pre-bankruptcy settlement procedures is from the wholesale and retail trade sector – 1,200 of them, followed by 881 construction companies and 761 companies from the manufacturing industry.

The largest debts, however, relate to construction companies that reported nearly 12.5 billion kuna in obligations, while the second place is held by the manufacturing industry with 9.6 billion kuna in obligations, and third are traders, whose obligations amount to 7.2 billion kuna.

By number of employees, manufacturing companies are in first place, with more than 16,000 employees, followed by construction companies, with 8,626 workers.

Aggregated data by counties indicates that the largest number of requests for initiating pre-bankruptcy settlements has been submitted by companies from the City of Zagreb, which also have the largest obligations – 1,349 companies have requested a settlement, reporting nearly 18.3 billion kuna in debt.

A settlement has also been requested by 447 companies from the Split-Dalmatia County, which owe 7.6 billion kuna, as well as 373 companies from Zagreb County with 1.3 billion kuna in reported obligations, 359 from Primorje-Gorski Kotar County with 4.2 billion kuna in debts, 294 companies from Osijek-Baranja County with total debts of 4.1 billion kuna, etc.