Corporate failures at lowest levels since 2004 as lenders become more flexible

Published at 11:04 AM on 01 November 2013

PwC analysis of today’s national corporate insolvency statistics found the number of company failures has decreased again as positive sentiment has seen banks providing more sustained support for businesses. 

4,717 companies entered insolvency in the third quarter of 2013. This is a decrease of 7.6% on the second quarter of 2013 when 5103 businesses failed. Year on year the number of collapses has dropped by 2.9% when 4856 businesses began insolvency proceedings in Q3 2012.

Comparing the first three quarters of 2013 with the same period in 2012, company collapses dropped by 9.5% (14436 year to date 2013 vs 15946 Q1-Q3 2012).

The number of administrations has decreased by 12.5% as 544 businesses failed during the quarter compared to 622 in the second quarter of 2013.

There were also slightly fewer Company Voluntary Arrangements (CVAs) in Q3 2013 in relation to the previous quarters. 152 companies entered CVAs compared to 160 in Q2 2013 and 161 in Q3 2012. 

In response to today's national corporate insolvency figures, Mike Jervis, business recovery partner at PwC, said:

"The insolvency statistics show that larger corporate failures are now back to the levels we last saw around 2004, when the economy was growing at a faster rate than today. There is more optimism amongst parties who either run or who are looking to invest in distressed companies and avoiding formal insolvency is the new norm.

"There are significant examples of forbearance in the lender market as banks continue to support businesses through turnaround techniques." 

ENDS

Notes to editors

• The Official Insolvency Statistics for Q3 2013 for England and Wales were released on 1  November 2013.
• The Tribunals, Courts and Enforcement Act 2007 introduced a new route into personal insolvency called the debt relief order (DRO), which came into effect from 6 April 2009.  DROs provide debt relief, subject to some restrictions, and are suitable for people domiciled in England and Wales who do not own their own home, have little surplus income (no more than £50 a month), assets (other than possibly a car) not exceeding £300, and less than £15,000 of debt. DROs do not involve the courts; they are run by The Insolvency Service in partnership with skilled debt advisers, called approved intermediaries.  A DRO lasts for a period of one year before discharge and, as for bankruptcy, there are penalties in place for debtors who seek to abuse the process.
• Additional information may be found on The Insolvency Service website here:

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/201311/index.htm

 

 


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