Coface: Construction companies are having trouble raising cash
“We have clear signs that the construction sector is suffering from the impact of the foreign financial crisis. As insurers of commercial risks, we are seeing a significant increase in the number of policies activated,” says Cristian Ionescu, general manager of Coface Romania.
Ionescu notes that the companies in the construction sector are experiencing a severe shortage of cash, and the money troubles of one player quickly hurt its partners.
“Very many companies are being sued for not having seen their contracts through, after they failed to find funds to continue work.”
The number of companies filing for bankruptcy in the first half doubled compared with the corresponding period of 2007, to almost 3,700 cases, and the number of bankruptcies is estimated to continue to increase.
There were approximately 1,900 insolvency filings in the same time last year.
Coface maintains Romania’s rating at “A 4 minus” and the representatives of the company warn that the current account deficit is very high, whereas the foreign indebtedness of the private companies continues to increase, so that the RON might see a substantial depreciation. The rating reflects the capability of Romanian companies to comply with their commercial obligations.