Irish firms’ bad debts top €1.2bn

COMPANY bad debt hit €1.2 billion in the first six months of 2010, with the 32 worst-affected liquidated firms owing €770 million between them.

New figures compiled by www.vision-net.ie show that the ongoing financial crisis is having a crippling impact on payments to creditors across the business spectrum.

An online survey by the group over the past six months indicates that liquidated Irish companies now owe a fortune in bad debt because they either cannot afford to pay back creditors or are still waiting on re-payments from other firms themselves.

Some 32 companies owe a massive €770m between them.

And with liquidity problems continuing to damage a host of industries, there appears to be no immediate end to the crisis.

According to the figures, 3.8% of liquidated companies surveyed each owe more than €5m, including 32 companies with bad debt of €770m.

A further 18.5% of firms questioned by www.vision-net.ie owe between €1m and €5m, while 14.6% are responsible for individual bad debt ranging between €500,000 and €1m.

Just over half of all liquidated companies surveyed — 50.7% — owe less than €500,000.

The figures are likely to further increase over the coming months as the financial crisis further impacts on Irish businesses.

Last week, liquidators were been appointed 25 companies, including:n12 in Dublin

* Two in Galway

* Two in Kildare

* One each in Cork, Carlow, Cavan, Donegal, Laois, Louth, Meath, Waterford and Wexford

The businesses affected were in the food, security, furniture, mechanics and finance sectors.

A further five companies have had receivers appointed to them in the past seven days, including two in Dublin and one each in Clare, Donegal and Wicklow.

According to statistics revealed by www.insolvencyjournal.ie earlier this month, Irish insolvencies were 27% higher during the first six months of 2010 compared with the same period last year.

Between January 1 and July 1, a total of 792 companies were declared insolvent — 170 businesses more than the 622 in the first half of 2009 and already more than the 773 insolvencies recorded during the whole of 2008.

Dublin has been the worst-hit location for firms going bust, with its 322 insolvencies in the first six months of 2010 accounting for 40% of all cases.