“A wave of bankruptcies, generated by the refusal of banks to refinance companies that have proven they are unable to bounce back, will come at the end of this year or the beginning of next year. Until now, these have rescheduled and restructured loans, but this cannot go on forever,” said Arin Stănescu, the head of the employers association of liquidators, whose business in this year’s first seven and a half months was similar to that posted for the whole of 2008.
Flamingo is one of the retail market leaders, after applying an aggressive entrepreneurial strategy, a strategic merger with Flanco, and intense financing of the company, including its listing on the stock exchange. The drop from this level was even harder. Stores began emptying, and then closing. The company’s Manager, Dragoş Simion, said that he took this chance with the company’s shareholders, when the economy was growing, and that a conservative strategy would have been risky for the fate of the management team at a time when the entire market was expanding aggressively.
“First of all, the Romanian management must have a joint action, and put pressure on government policies at the macroeconomic level,” Emilian Radu, Strategic Partner for PricewaterhouseCoopers Romania, said. Codruţ Pascu, Managing Partner of Roland Berger, warns that companies with a high degree of indebtedness are most affected. “The difficulties in contracting new loans prevent the refinancing of existing ones, and higher interest rates put more pressure on companies,” Pascu said.
