Entrepreneurs to sell non-core business to secure financing

Investment bankers say many local entrepreneurs will try to sell part of their non-core business or even portions of their core business to secure liquidity to finance their business, as lending is increasingly more expensive and harder to obtain.

“There will be increasingly more low value transactions,” Capital Partners founder and Main Partner, Doru Lionachescu, said.

One of the local entrepreneurs who admits he is considering the sale of parts of his business is Dan Ostahie, founder of the Altex group of companies. Altex is market leader on the household appliance retail market.

“As a crisis strategy, each company should identify its own core competence, because in times like these it is possible to gain market share, and the opportunity of companies prepared for a crisis period is to gain a market share,” Ostahie added. To do this, businesspeople should drop the sandbags that are not necessary, in other words give up ancillary activities, which are no longer useful and can drag down a business. It is good to externalize these or give them up,” said Ostahie.

However, Filipescu said that the current environment is not favorable for sales. “At present, the prudent behavior is neither to sell nor buy, but to wait,” she said. Filipescu is expecting bankruptcies in several industries, due to a lack of financing. Furthermore, several investments could be canceled and the local economy could contract, as several companies will exit the market and start-ups will become increasingly difficult.