Dozens more com­pa­nies set to go bust by the end of this year

Kathimerini English - - Front Page - BY EVGENIA TZORTZI

A num­ber of well-known cor­po­rate names in food, car sales, health­care and even heavy in­dus­try (led by steel com­pa­nies) are among the dozens of firms ex­pected to go bust by the end of this year. Mar­ket ex­perts speak of as many as 50 com­pa­nies go­ing bank­rupt within 2016, with many al­ready prac­ti­cally in de­fault.

The most likely sce­nario is for banks to cap­i­tal­ize the com­pa­nies’ debts, with threat­ened firms re­sort­ing to pro­tec­tion from their cred­i­tors in or­der to gain some time.

The de­vel­op­ments ex­pected in the next few days in­clude a deal in the car deal­er­ship sec­tor, where, de­spite the re­cov­ery seen in the last year, there are se­ri­ous prob­lems from the ac­cu­mu­lated de­cline of sales in pre­vi­ous years. Sources say that cred­i­tor banks are pro­mot­ing a so­lu­tion for the trans­fer of Hyundai’s rep­re­sen­ta­tion in Greece (Hyundai Hel­las) to another mar­ket player.

In the case of Euromed­ica, which has high lev­els of bor­row­ing and neg­a­tive as­sets, banks have opted for the cap­i­tal­iza­tion of debts and a change in man­age­ment.

De­ci­sion time has also come for the steel in­dus­try, with two out of the coun­try’s three com­pa­nies hav- ing been at a vir­tual stand­still for the last few years. Sources say that dis­cus­sions with banks to find a so­lu­tion are un­der way with all mar­ket play­ers, as the prob­lem has to be dealt with rapidly.

In the food in­dus­try, de­vel­op­ments de­pend on what hap­pens with the cri­sis sur­round­ing the Marinopou­los su­per­mar­ket. Fail­ure to find a so­lu­tion will also sig­nal the end for a large num­ber of small sup­pli­ers as well as some larger com­pa­nies whose cap­i­tal­iza­tion is smaller than what they are owed by Marinopou­los. Their prob­lem is that those debts do not have any col­lat­eral at­tached to them that would save the sup­pli­ers in case the su­per­mar­ket chain defaults.

Al­though banks are among the Marinopou­los cred­i­tors that have se­cured some col­lat­eral, they are not any bet­ter off. That is be­cause the col­lat­eral at­tached to the loans is­sued is far be­low their ex­po­sure adding up to 260 mil­lion euros, the state would take pri­or­ity in be­ing paid the over 100 mil­lion euros due to it in case of a de­fault, and – cru­cially – the fail­ure to stream­line Marinopou­los would cre­ate a domino ef­fect on en­ter­prises that banks have also lent money to, which would then be un­able to ser­vice their debts to the credit sec­tor.

Fail­ure to stream­line Marinopou­los would cre­ate a domino ef­fect on its sup­pli­ers that would then be un­able to ser­vice their debts to banks.

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