After 5 months of enjoying exceptional government aid, troubled French companies have only 45 days to announce their inability to pay their dues before the Commercial Court, and this will lead to a wave of bankruptcy cases in the coming weeks.
In an article published by the French newspaper Lesechos, the writer Guillaume de Calignon says that the measures taken by authorities to support affected companies from March 12 to August 24 have led to the mitigation of the devastating economic effects of the Corona pandemic, but that may not. It stops the wave of bankruptcy that experts expect in the coming period.
Governmental actions :
Bruno de Mora Fernandes, an economist at the French foreign trade insurance company, Coface, confirms that “in most European countries, such as Spain, Italy or the United Kingdom, there have been temporary amendments to bankruptcy law to try to delay the declaration of bankruptcy by troubled companies and give them a chance to recover. During the closing period. ”
According to the writer, France has succeeded in achieving this goal to a large extent at least until mid-August, when the “Altaras” institution has monitored only 20 thousand and 250 bankruptcies since the beginning of this year, which is 40% less than the bankruptcy cases that were recorded during The same period last year.
But things may deteriorate sharply in the coming period, and Terry Mellon, director of studies in Altares, believes that “from now on it will be difficult to avoid waves of bankruptcy,” especially in sectors such as tourism, sector of organizing parties and events. hotels and restaurants.
Fernandes expects that in 2021 bankruptcies will reach the level they reached after the 2009 financial crisis, about 62,000 bankruptcies annually.
Threatening corporate issues :
Dennis Lobos, president of ARC, a company specialized in debt collection, talks about what happened in the past period, saying, “During the period of closure and the decline in economic activity, companies followed two different approaches, some of which benefited from government measures to the maximum extent and did not pay suppliers despite obtaining loans from the state. On the other hand, other companies paid their bills on time as much as possible, and this prompted suppliers to file cases against the first category, and leniency with the second category.
Terry Mellon believes that the longer the owners of troubled companies resort to commercial court, the less likely they will receive support, the problems accumulate more and the possibility of their continuation becomes very slim.
Mellon adds, “Since the beginning of last April, cases have been filed against at least 100 small and medium-sized companies, each employing more than 100 employees, and achieving sales of more than 20 million euros. Most of the cases have been filed before the bankruptcy court, and they have managed Some companies were able to conclude reconciliations and were able to continue their activities according to the restructuring plan. ”
Loan repayment postponement :
The French government has made progress in its negotiations with banks to extend the period of repayment of loans owed by troubled companies.
Fernandes comments, saying that the French authorities have no interest during the current period in pressuring companies to quickly repay the loans they obtained last spring.
The French Economy Minister, Bruno Le Maire, announced in an interview with Les Echos that he wanted to establish a long-term loan system for a period of at least 7 years, in order to support French companies.
Dennis Lobos expressed his support for this approach, saying that the real difficulty facing small and medium-sized companies is their lack of sufficient capital to face the crises.
This means that any other injury between the players will stop the team activity.
In recent weeks, several French first-division clubs have reported injuries to Lyon, Marseille, Rennes, Nantes and Montpellier.
This led to the postponement of the season-opening match between Marseille and Saint-Etienne on August 21.