The total number of insolvencies of Polish enterprises in 2021 amounted to 2,125, which means an increase of 71% y / y, according to the Coface report. Compared to the result after 6 months of last year. (an increase of 160%) and after 9 months of last year. (increase by 131%) the growth rate decreased, mainly because the last year’s base was increasing – new out-of-court proceedings appeared in the statistics from the third quarter of 2020 and were gaining in popularity every month.
The total number of insolvencies was made up of court proceedings (44%) and out-of-court notices (56%). In 12 months of 2021, the number of out-of-court confirmed insolvencies using the new procedure introduced by the Act of 19 June 2020 by more than ¼ exceeded the number of cases carried out by the court available so far:
– throughout 2021, the courts announced bankruptcy and restructuring decisions for 935 Polish companies (according to data at the end of December 2021), i.e. 5.5% more than in 2020.
– Additionally, as many as 1,190 entities announced insolvency in the form of a new simplified procedure for approval of an arrangement (without registration in court) in Monitor Sądowy i Gospodarczy. This is more than three times more than a year ago (we must remember, however, that in 2020 these procedures were only applied in the second half of the year), according to the report.
Among the court proceedings, liquidation bankruptcies were announced the most – 373, but their number and share clearly decreased. Proceedings for approval of an arrangement were in second place (328). This is a huge increase, because there were 28 of them throughout 2020. The number of accelerated arrangement proceedings decreased (from 213 in 2020 to 132 in 2021), which was influenced by the emergence of a new out-of-court procedure. The number of rehabilitation proceedings also decreased (from 112 to 76), as emphasized in the report.
The year 2021 saw an increase in insolvencies in all industries, which reflects the economic situation related to the restrictions resulting from the pandemic. The biggest jump was recorded in agriculture (+ 202%). Services struggling with accessibility to the customer (+ 74%) were in second place, and retail trade (+ 59%) was third. In other sectors, the increase in insolvencies did not exceed 50% y / y. In total, the largest number of cases were announced in services (589), which accounts for 28% of all insolvencies in Poland in 2021, it was also reported.
The share of entrepreneurs’ insolvencies clearly increased, accounting for 58% of all cases (40% in 2020).
“The year 2021 ended with the highest number of corporate insolvencies in over 20 years. Compared to the previous year, the increase in proceedings amounted to as much as 71%. Undoubtedly, the insolvency statistics show the negative impact of the pandemic and its economic consequences on the situation of enterprises in Poland. It should be remembered, however, that A dedicated solution to support companies in a difficult liquidity situation was introduced to the Polish legal system in June 2020 – a simplified procedure for approval of an arrangement.In the last year and a half, this type of procedure has become very popular due to the speed of its implementation and the lack of the need to announce the decision by the court. In 2021, simplified proceedings for approval of an arrangement accounted for more than half of the total number of proceedings (56%). Along with the subsequent quarters, companies in a difficult liquidity situation were more and more willing to use quick forms of restructuring provided for by law to protect against enforcement proceedings against the debtor. However, the extent to which they are used does not equal their effectiveness. Only some of the previously simplified procedures translate into the number of agreements approved, even despite the huge increase in the number of proceedings for approval of the arrangement as one of the ‘traditional’ judicial forms of restructuring,” said Grzegorz Sielewicz, chief economist of Coface in Poland and in the Central Europe Region.
The expert also pointed out that it is important that in Poland there is a lower number of companies filed for court bankruptcy in order to liquidate their assets. In 2021, such decisions were 26% less than the year before and concerned 373 enterprises, which was a result comparable to 2008. The wide scale of the introduced aid activities stopped the surge in bankruptcies that could be expected after such a widespread crisis caused by the COVID-19 pandemic.
“We will gradually observe the ‘normalization’ of corporate insolvency statistics in Poland. The dynamics of changes will not be so high, but the number of traditional forms of restructuring and bankruptcy in order to liquidate assets will increase. , they will not be able to survive on the market The macroeconomic environment should be favorable to enterprises According to Coface’s forecast, economic growth will reach 5% this year. The Polish economy is already powered by the main engines of growth, i.e. household consumption, demand in foreign markets and higher investments in fixed assets. […] Unfortunately, high costs of raw materials, production components and disruptions in global supply chains will still remain at least in the first half of 2022. In addition, inflation higher than in previous years, rising energy costs, higher interest rates, uncertainty related to the development of the pandemic, shortages in the labor market or the wage-price spiral will be threats on the way to full economic recovery,” he added.
In 2021, over 1/5 of all insolvencies concerned companies and entrepreneurs operating in Mazovia. Wielkopolska and Górny Śląsk were also in the lead, these three voivodeships are responsible for a total of 45% of all insolvencies. The only region that recorded a slight decrease in insolvency in 2020 was the Świętokrzyskie Voivodeship.
Source: Coface and ISBnews
