23 January 2018

Parkiet: “Companies facing financial difficulties are on the rise”

“Despite continous economic growth an alarming number of Polish enterprises – WSE companies included – experience lack of liquidity. Will they get ahead?” asks Monday’s Parkiet. The article includes a commentary by Dariusz Lewandowski, President of ARIA Fund.

The latest publication of Parkiet shows that in 2017 the number of insolvent enterprises in Poland increased by as much as 15 percent. A lot of WSE listed companies are facing money trouble. Many has share prices below PLN 1. In total, penny stocks make up for over 40 percent of the main market, which is over a dozen percent more than six months ago. Parkiet points out that bankruptcy is not always the end game for a business. One of the applied methods of crisis management is systemic and sanation bankruptcy. “A model example of sanation is the exchange of debt into capital. PBG and many others has chosen to go down this path” says Dariusz Lewandowski, president of ARIA Fund. Among the industries that in his opinion are highly susceptible to economic climate Lewandowski lists construction and real estate development, where debt is often commonplace. “Warren Buffett says ‘you only find out who is swimming naked when the tide goes out’. In other words, who is more indebted than the debt-to-equity ratio allows” the expert adds. It is not without reason that WIG-construction index is in a strong downward trend. Only in the last six months it lost almost a fifth of its value. Full article here (PL): Parkiet Newspaper