A French legal information provider Infolegale, said that France faces the risk of experiencing a first “significant” wave of corporate bankruptcies from the end of April as the most fragile companies succumb to the economic impact of the Covid-19 pandemic.
Based on bankruptcy rulings issued between April 1 and 3, Infolegale claimed that the companies most at risk employed fewer than five people and had annual sales of less than €800,000. It noted that 68 percent of the firms that when bankrupt in early April had less than €10,000 in capital and 58 percent had posted an operating loss over the previous two years.
It pointed out that 23 percent of the companies that went under were involved in retailing.
“We will see a first significant wave of bankruptcies at the end of April,” declared Infolegale’s chairman, Frédéric Julien. Over the coming months, companies will be hit by overdue payments, he added, pointing out that a quarter of them are caused by outstanding payments.