For the first time in Ukraine, the company started a preventive restructuring procedure. Such a step is taken when the owner is aware of serious financial problems of the business and changes the conditions for fulfilling credit obligations without ceasing operations. The new mechanism allows you to save business and avoid bankruptcy, informs The opendatabase.
“A total of 1,087 Ukrainian businesses are in the process of ceasing their work since the beginning of the year. 66.7% of them independently ceased operations without a court bankruptcy procedure – 725 companies. This means that the company has no debts, but its owners decided to close the business”, says the message.
Recently, the number of independent business closures has been decreasing: this year, this indicator is 23% lower than last year. The reason is the growing responsibility of owners and management to creditors and existing debts.
Another 164 companies are currently in bankruptcy proceedings through the court. This is 22% more than at the beginning of last year. In addition, 118 enterprises entered the stage of judicial liquidation due to the inability to settle debts. In such cases, the funds to the creditors come from the sale of the company’s property.
Another 80 businesses are undergoing reorganization — transformation into another project through merger, division or merger. This indicator is 63.5% lower compared to last year. This procedure is sometimes used to hide questionable assets or partners.
“In my opinion, most enterprises have financial difficulties, but currently it is too difficult and risky for the owners to resolve them through court procedures. If you have already become bankrupt, then rehabilitation is unlikely to help change anything. In fact, this is only a reflection of the general state of business and the economy as a whole.” — noted Denys Lyhopek, arbitration manager, member of the Qualification Commission of Arbitration Managers, bankruptcy specialist.
According to him, only 5-10% of all procedures reach the stage of rehabilitation — restoration of solvency. The reason is that companies turn to court mechanisms for financial recovery too late.
