Romania’s central bank: 45 per cent of the companies “not economically viable”

Romania’s central bank headquarters, Bucharest, Romania (Gabriel, CC BY)

Hungarian companies short of 340,000 employees

Czech government to take over insolvent coking coal company

Romania

45 per cent of Romanian companies operate with levels of capital below the regulatory minimum. The information was released by Romania’s National Bank (BNR). BNR points out these companies “are not economically viable” and “present a risk”. According to the BNR they should be liquidated by the state.

Companies that face an acute capital shortage are mainly financed through excessive borrowing. Their debts exceed the shareholders’ financial contribution more than twofold. Moreover, the Romania Insider reports that in general the number of companies in Romania is very low. It’s only 22 companies per 1,000 inhabitants (the lowest level in Europe where the average is about 44)

Romania Insider writes „ 275,500 out of the 608,000 companies that submitted their balance sheets to the Ministry of Finance last year had the shareholders’ equity lower than 50 per cent of their share capital, which is the minimum level required by law. Some 268,000 companies even had negative equity, which means that their debt was higher than the value of their assets, according to BNR. The companies with negative capitals received funding in the form of loans from shareholders or intra-group loans worth RON83.4bn (EUR18.4bn)”.

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Hungary

The Daily News Hungary reports, after an economic research institute GKI, that Hungarian companies lack some 340,000 employees.

According to the survey, Hungarian companies employing 5-20 workers are looking to hire around 150,000 workers, while bigger companies have a shortage of 133,000 workers. Microcompanies with 1-5 employees seek to hire 57,000 employees. The biggest shortage is in the light industry where additional hires could reach 32 per cent of the present workforce. Business services could hire 23 per cent of their current workforce, and the manufacturing sector 16 percent.

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Czech Republic

Czech government plans to buy the country’s sole hard coal (or coking coal) company, OKD, Radio Praha reports. The company is now under insolvency administration. A bid of CZK1.0 (EUR0.04) was submitted by the state company Diamo on December 16th. This was revealed by Jan Mládek, Czech Minister of Industry and Trade, after OKD called for another state aid amounting to CZK723m (EUR26.7m). OKD has already got a loan of CZK700m in the middle of 2016.

Radio Praha informs that “Diamo is, apparently, one of around 10 bidders which has so far expressed interest in taking over OKD to the insolvency manager, Lee Louda. The business daily Hospodářské Noviny reported Wednesday that a series of Czech coal company bosses who previously expressed interest in a buy- out are not among the list of 10 so far.”.

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What’s up in indexes

BUX (of Budapest) was up 0.16 per cent d/d and by 32.79 per cent from year-end. It increased from 31713.50 index points Tuesday, December 20th to 31765.30 index points Wednesday, December 21st.

BET (of Bucharest Stock Exchange) decreased from 7026.31 index points Tuesday, December 20th to 7022.57 index points Wednesday, December 21st. So it dropped by 0.05 per cent d/d. From year-end it’s up 0.29 per cent.

PX (of Prague) was up 0.01 per cent – increasing from 917.48 index points Tuesday, December 20th to 917.55 index points Wednesday, December 21st. From year-end it dropped by 4.06 per cent.

WIG20 (of Warsaw) dropped by 0.65 per cent d/d – falling from 1940.46 index points Tuesday, December 20th to 1927.90 index points Wednesday, December 21st. From year-end it’s up 3.70 per cent.

OMXT (of Tallinn) was up 0.94 per cent d/d and up 19.18 per cent from year-end. It increased from 1061.51 index points Tuesday, December 20th to 1071.45 index points Wednesday, December 21st.

OMXR (of Riga) was up 0.64 per cent d/d and up 23.06 per cent from year-end. It increased from 726.76 index points Tuesday, December 20th to 731.39 index points Wednesday, December 21st.

OMXV (of Vilnius) was up 0.33 per cent d/d and up 13.47 per cent from year-end. It increased from 549.60 index points Tuesday, December 20th to 551.44 index points Wednesday, December 21st.

SAX (of Bratislava) was up 0.84 per cent d/d and up 8.79 per cent from year-end. It increased from 315.39 index points Tuesday, December 20th to 318.04 index points Wednesday, December 21st.

SOFIX (of Sofia) increased from 573.46 index points Tuesday, December 20th to 574.92 index points Wednesday, December 21st. So it’s up 0.25 per cent d/d and up 24.74 per cent from year-end.

UX (of Kyiv) increased from 762.59 index points Tuesday, December 20th to 781.35 index points Wednesday, December 21st. It’s up 2.46 per cent d/d and up 13.92 per cent from year-end.

CROBEX (of Zagreb) was up 0.71 per cent – increasing from 1970.48 index points Tuesday, December 20th to 1984.46 index points Wednesday, December 21st. From year-end it’s up 17.45 per cent.

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