Austria's bankruptcy surge: Highest in 15 years

By Timo Kirez

GENEVA (AA) – Austria is grappling with the highest number of bankruptcies in 15 years, as revealed in a press release by the Alpenlandischer Kreditorenverband (AKV Europa) on Monday.

The data shows that 2,098 corporate insolvencies were recorded in the first six months of this year, marking a 35.8% increase from the previous year and the highest number in over a decade.

Liabilities for Austrian companies have skyrocketed to €11.5 billion ($12.5 billion), a ninefold increase compared to the same period last year. Major bankruptcies in the retail and real estate sectors characterized 2023, and the state creditor protection agency forecasts around 7,000 insolvencies for 2024.

A significant portion of this year's liabilities is linked to the insolvency of Signa Holding's founder, Rene Benko. Signa Holding, once Austria's largest real estate company, filed for bankruptcy in 2023. Additionally, the Austrian subsidiary of US electric car manufacturer Fisker contributed approximately €1.5 billion ($1.6 billion) to the liabilities.

AKV Europa attributes the high number of bankruptcies to consumer and investment reluctance affecting many Austrian companies. The authority also noted that high interest rates and a lack of demand for credit negatively impacted new construction projects.

The retail sector has been hit hardest by the current economic situation, with 529 insolvencies, followed by the construction sector with 493, and the gastronomy sector with 356 registrations.