“Recently we have seen more demand for assets under liquidation, which means there is not only liquidity on the market but also buyers. It is an improvement compared to last year and the difference in asking and buying prices has been lower lately,” Jurgen de Ruijter, BCR executive director for restructuring said Thursday at a conference on business restructuring organized by Ziarul Financiar.
He said many companies prefer not to outsource restructuring activities considering most specialized platforms for the sale of assets under liquidation are more retail than corporate oriented.
Georgiana Popescu, receivables restructuring director with BRD, said there is an improvement of the insolvency market compared to last year in terms of liquidated asset sales.
“There is dialog with foreign markets, we have the potential to sell. In terms of debt recovery, this is the year we have to sell very well, we’ll be selling businesses, concepts. Lenders and debtors alike must have reasonable expectations, there is still a waiting gap between the parties involved in insolvency procedures. Unless these expectations are aligned, we may find ourselves in the situation of being each other’s prisoners,” said Popescu.
Popescu said she supports business restructuring outside of insolvency because the procedure is more flexible, businesses may act in real time, with lower costs than under insolvency, and with less damage to the company’s image.
“Under insolvency, as far as banks are concerned, costs are very high: cost of time, of resources allocated by debtors and creditors alike. Companies prefer insolvency because people tend to dream too much and want too much. They believe they are sheltered under insolvency, they pull themselves together and everything is fine after that,” Popescu said.
She added all the company’s in BRD’s portfolio have gone through restructuring in the past three-four years.
“Economic conditions have changed dramatically, it’s impossible for a lending structure from five years ago to produce the same effects in the new context. Companies needed to adapt to the new environment,” Popescu said.
Marilena Ivascu, arrears director with CEC Bank, is also in favor of restructuring outside insolvency.
“We want to get as many businesses back on their feet as we can but without the lengthy procedures entailed by insolvency. I don’t like insolvency but without it we can’t meet all the conditions required to speed up restructuring. There has been an improvement in the sale of assets under liquidation but it would be better if there were a regulated market for investment funds to buy businesses, assets,” said Ivascu.