Com­pa­nies go­ing bust

But in­di­vid­u­als hold out

Finweek English Edition - - Economic Trends & Analysis - GRETA STEYN gre­tas@fin­

THE RE­CES­SION IS re­ally tak­ing its toll on com­pa­nies and close cor­po­ra­tions, forc­ing many of them into liq­ui­da­tion. Statis­tics SA fig­ures show that the to­tal num­ber of liq­ui­da­tions for the first four months of 2009 in­creased by 45,3% com­pared to the first four months of 2008.

Stats SA said the in­crease in liq­ui­da­tions in the first four months was due to in­creases of 48,2% in vol­un­tary liq­ui­da­tions and 22,4% in com­pul­sory liq­ui­da­tions. When bro­ken down into com­pa­nies and close cor­po­ra­tions, the in­creases are 54,6% and 37,8% re­spec­tively. The to­tal num­ber of com­pa­nies liq­ui­dated in the first four months of this year was 1 357.

It took a while for liq­ui­da­tions to re­spond strongly to the eco­nomic cri­sis, as com­pa­nies tried to stay afloat de­spite high in­ter­est rates and slack­en­ing de­mand. Most of the liq­ui­da­tions came from the re­tail and fi­nan­cial sec­tors.

On the in­di­vid­ual and part­ner­ship front, the bank­ruptcy fig­ures are less shock­ing, show­ing per­haps that the worst is over. The to­tal num­ber of in­sol­ven­cies in­creased by 10,5% in the first quar­ter of this year, but was down in March com­pared to the same month a year ago.

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