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Bankruptcies soar by 35.8%

A study has revealed that the amount of bankruptcies in Portugal has risen by nearly 36% in a year.

The report by Coface published the number of business insolvencies registered between October 2010 and October 2011.

The report showed that the number of Required Declared Insolvencies (by law) had rocketed by 33%, while Declared Insolvencies had registered an increase of 12.9%.

But with regards to Insolvency Plans – where creditors accepted a Company Viability Project – there was an increase of 16.7%.

Porto, Lisbon and Braga had the highest number of bankruptcies with 1,087, 882 and 606 respectively.

However, in terms of percentage increase, the worst affected areas were Angra do Heroísmo (Azores) (200%) and Vila Real (146.7%).

The sectors worst affected by bankruptcies were the manufacturing industries (973), construction and public works companies (832), services (662), wholesale trade (659), and retail commerce (639).

In percentage terms, the sectors that displayed the highest increases were electricity, gas and water (333.3%) and agriculture, hunting and fishing (90.6%).

The second quarters of the years 2007 to 2011 saw a sharp increase in the number of bankruptcy cases registered in the courts of all kinds, with the most aggravated period being the second quarter of 2011.

And according to another report by the Ministry of Justice, which examined the years 2007 to 2011, the percentage increase of registered bankruptcies between the second quarter of 2007 and 2011 had soared to 243.2%.

In 2011, the number of cases pendant at the end of the second quarter revealed an increase of around 4.7% compared to the first quarter of 2011.