Corporate administrations down 43% to four year low
Despite fears of a double dip recession, corporate administrations have dropped to a pre-credit crunch low according to analysis by business advisory firm Deloitte.
Research shows that the first six months of 2010 saw 1,065 administrations, down 43 per cent on the same period last year and even 25 per cent less than H1 2006, the last full year before the financial downturn began, which saw 1,419 administrations.
In addition, administrations dropped 18 per cent in the second quarter of 2010 compared with the first three months of the year.
Simon Adcock, reorganisation services partner at Deloitte in Birmingham, said: “Whilst Deloitte’s latest CFO Survey revealed increasing fears of a double dip recession, these figures paint a more positive picture and may provide a corporate confidence boost.
“The proactive approach adopted by companies and lenders alike has had, and continues to have a positive effect in most distressed situations. By acting sooner, companies have been able to remedy problems more effectively. Equally, lenders have been supportive, preferring to make debt for equity swaps or even advance suitably priced risk capital, rather than crystallise their debt through an insolvency process.”