Liquidations on the Rise

May 28 - In an obvious reaction to poor market conditions and one of the worst economic recessions felt in history, statistics show a significant increase in the number of corporate liquidations in South Africa.

The number of liquidations in the country jumped by 41.3% in April 2009 if compared on a year to year basis to statistics in 2008.

In the the four month period (January 1 to April 30, 2009), the number of liquidations overall was reported at 1357 - a 45.3% rise when compared to same time period last year.

The Credit Guarantee Insurance Corporation in South Africa said that it was not surprised at the figures as they fit the current situation in the market.

The group could also not give good news for South Africa's corporate world and predicted that by the end of the year, the country should see no less than 4,200 corporate closures.

In 2008, that number was 3,300.

The General Manager for Marketing, Research and Development of the Credit Guarantee Insurance Corporation, Roger Munitich said: "That obviously presupposes that interest rate relief will start to benefit cash strapped consumers and battling firms alike in the months ahead."

"The largest services industry, financing, insurance, real estate and business services saw 51.6% more failures at 561 from 360," said Munitich.

Other statistics showed that there had been a 125% increase in agricultural failures, and a 105.7% increase in construction firm failures.