Concordat applications hit a record in 2023, liquidations increased

Under the influence of challenging financial conditions, many businesses experienced financial problems last year. The deterioration of demand conditions for businesses, increasing cost pressures, and difficulties in accessing financing made 2023 a difficult year. 2023 drew attention with a record number of applications following the "concordat storm" of 2018 and 2019, when bankruptcy postponement was abolished. In the first 11 months of last year, approximately 20 thousand companies shut down, while liquidations increased by 27.5 percent.

The financial bottleneck, which points to a critical situation in working capital, brought about a very challenging 2023 for the real sector. The 2023 balance sheet has begun to be revealed, and the number of concordat files granted a temporary grace period throughout the year reached 519. This figure is the highest level since the concordat applications in 2018 and 2019. Furthermore, while the number of companies that closed in the January-November period of last year increased by 7.2 percent to 19 thousand 931, the number of companies applying for liquidation exceeded 24 thousand.

The construction and textile sectors were identified as the risky sectors that stood out in concordat applications. The construction sector ranked first with 45 files, followed by textiles with 43 files and furniture with 16 files. In addition, the increase in the number of concordat applications from the shopping mall, energy, food, healthcare services, hospitality, packaging, metal product manufacturing, and medical equipment sectors drew attention.

Among the companies that initiated the concordat process are significant businesses. Well-known brands such as Emek Kumaş, Göktekin Enerji, and Forum AVMs filed for concordat due to financial difficulties.

During this period, there was also a notable increase in liquidation applications. In the first 11 months of 2023, the number of companies that decided to liquidate reached 24 thousand 45, an increase of 27.5 percent compared to the same period of the previous year.

On the other hand, sector representatives point out that creditors suffer a loss of value because the concordat process takes a long time and approval decisions are generally issued in the form of interest-free principal payments. It is stated that if there is no improvement in the financing channels of firms, the concordat option will continue to remain on the table.

News Source: 12punto