2010 total stabilising

2010-10-27 00:00

ALTHOUGH the number of liquidations and insolvencies have stabilised somewhat in 2010, the prevailing level is well above the pre-recession lows of 2006 and early 2007.

There was a 2,1% increase in the number of liquidations recorded in September 2010.

The total number of liquidations in the first three quarters of 2010 dropped by 1,6% on the back of a major decline in compulsory liquidations. Company liquidations during this nine-month period remained stable.

The most liquidations during the first three quarters of 2010 were recorded in the “financing, insurance, real estate and business services” sector, which account for more than 45% of the total.

The total number of liquidations recorded for August 2010 declined by eight percent year on year from 264 to 243, while the figure for July 2010 was 34,3% lower year on year, according to Statistics South Africa.

There was a 47,2% year-on-year decline in the number of insolvencies in August 2010.

Although the number of insolvencies has been on a steady downward slope since mid-2009, this figure is also well above the levels experienced in 2006 and 2007.

Liquidation is when a company winds up its affairs when liabilities exceed assets. — WR.

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