Bankruptcy proceedings increased in first quarter

INEThe number of companies declared bankrupt in Spain increased by 21.5% in the first quarter as compared with the same period of 2011, according to new figures released by the National Statistics Institute (INE).

Of the companies, 31.3% had construction and property development as their main activity.

During the first quarter of 2012, the number of debtors processed reached 2,224, representing a 21.5% increase, as compared with the same period the previous year.

By type of proceeding, 2,105 were voluntary (22.3% more than the first quarter 2011) and 119 were necessary (9.2% more). Considering the type of proceedings, ordinary proceedings increased 149.6%, and abbreviated proceedings increased 11.7%.

Companies processed, by legal nature and turnover bracket

Of the 2,224 debtors processed in the first quarter, 1,958 were companies (individuals with business activity and corporations). 75.3% of the companies declared bankrupt were Private Limited Companies.

67.1% of the companies declared bankrupt were within the lowest turnover bracket (less than two million euros), and were mainly Private Limited Companies.

87.1% of companies declared bankrupt during the first quarter of 2012 did not belong to any business group. Of the remaining companies declared bankrupt, 12.2% belonged to a Spanish group, and 0.7% to a group under foreign control.

Companies declared bankrupt, by economic activity and number of employees

31.3% of companies declared bankrupt carried out their main activity in Construction and property development, 18.7% in Industry and energy, and 17.7% in Trade.

Regarding the number of employees, 60.6% of the total number of companies declared bankupt were within the bracket of 1 to 19 employees.

Geographical distribution of debtors processed

The Autonomous Communities of Cataluña, Comunitat Valenciana, Comunidad de Madrid and Andalucia accounted for 58.4% of the total debtors processed during the first quarter of 2012.

Cantabria, La Rioja and Extremadura were the Autonomous Communities with the fewest debtors processed.

You can download the full press release here: Bankruptcy Proceedings Statistics – First quarter of 2012

Companies declared bankrupt increased in 2011

BankruptcyThe National Statistics Institute (INE) has released figures showing the number of debtors in Spain declared bankrupt in 2011 rose 13.3%, compared to the previous year, to 6,755.

The figure includes 5,821 companies (a 16.7% increase) and 934 individuals without business activity declared in bankruptcy proceedings, representing a 3.9% decrease from 2010.

Of the total, 6,472 declared voluntarily (a 14.5% increase from 2010) and 283 were forced (9.3% less).

One in three companies declared bankrupt specified ‘Construction and property development’ as their main activity, confirming the fears that the crisis would have a dramatic affect on the industry.

The Transport and storage industry saw the lowest increase in bankruptcies with only 2.9% compared to 2010. In contrast, Trade was the economic activity which saw the largest increase in bankruptcies, rising 23.4%.

According to type of company processed, the number of individuals with business activity decreased 11.1% in the interannual rate, whereas the number of private limited companies increased 18.2% and public limited companies increased 14.1%. The majority of companies declared bankrupt were private limited companies (76.3%).

According to the figures 65.4% of the companies declared bankrupt operated within the lowest turnover bracket of less than two million euros. This bracket includes all individuals with business activity, 68.3% of private limited companies and 44.1% of public limited companies.

By region the autonomous community of Cataluña saw the highest number of debtors with 1,507 processed. Valencia was next with 995 while Madrid saw 849 bankruptcies. Andalucía processed 784 but together these four regions accounted for more than half of the total debtors (61.2%).

The number of debtors processed in the fourth quarter of 2011 was 1,692 showing a 13.6% increase over the previous quarter.

You can read all the details here: Bankruptcy Proceedings Statistics – Fourth Quarter 2011

Worries for some, Christmas for others!

Spanair now face huge fines

Over the weekend you may have seen something on the news about a little airline called Spanair.

This was an airline started in the 80’s by Scandinavian carrier SAS as a charter airline offering connections to the Balearic islands from the mainland.

Over the weekend the airline landed it’s last flight and suspended its operations without warning anyone, including staff. Around 23,000 passengers were left stranded or trying to reschedule flights.

Spanair were already controversial as, since 2009, they had only managed to stay afloat with the help of some €150 million of subsidies from the Catalan authorities. This had caused other airlines, quite rightly, to question the legality of the payments and there was already an antitrust decision pending by the European Commission.

The Spanish government now intend to fine the airline up to €9 million for the abrupt closure, says Ana Pastor, the Spanish development minister.

Surely if Spanair had €9 million they wouldn’t be closing? Maybe a better use of your time Ms. Pastor, would be to look at the reasons for the closure and try to ensure the same thing doesn’t happen to other struggling carriers.

Maybe the fine could be paid by Mr Francisco Luzón, executive director of Santander (Americas division).

Christmas seems to have come early for him as he is stepping down after 15 years and will be taking a generous €56 million retirement package with him.

Santander say the Americas contributed €4.8bn to the banks total profits in 2010, and therefore the retirement package is in line with achievements.

A quarter of Spanish people are out of work. Half of young people are out of work. Is it right for one man to receive such a payment when so many others in Spain are on the poverty line?

This isn’t the first Spanish bank to make such an award. When José Ignacio Goirigolzarri retired early from Santander rival BBVA, his €3m annual pension was called an “obscenity” by a member of parliament.

I think the UK has had the most public outcry over executive pay and pension awards but this is sure to rattle the Spanish and I’m sure there will be a backlash of some sort.