INTER-COMPANY INDEBTEDNESS IN BULGARIA SURPASSES BGN 163 BILLION

Intercompany indebtedness of enterprises from the non-financial sector exceeded BGN 163 bn at the end of 2011, showed a survey of the Bulgarian Industrial Association (BIA), presented by its leadership. In 2011 alone, corporate indebtedness increased by around BGN 5.2 bn.

The positive thing, however, is that its pace has slowed down, compared to the previous year, commented BIA’s Vice Chairman Kamen Kolev. Short-term liabilities in the total indebtedness of companies were growing faster, while long-term debts even declined slightly on an annual basis. According to BIA, this indicates that firms are short of funds for long-term investments.

The most indebted sectors in Bulgaria are trade, real estate and construction. On the whole, proceeds from sales continued to grow more slowly than companies’ liabilities, which is an indication that in the coming years, these companies will not be able to pay off duly their liabilities.

BIA’s survey showed as well that the largest creditors of companies in 2011 were banks (30% of the total liabilities), followed by companies from the same sector as the debtor (23.6%) and suppliers (18%). The situation was similar in 2010, while in 2005, liabilities to suppliers accounted for the larges share of corporate debts (27.1%).