February External Administrations at Monthly Levels Not Seen Since Mid-2000s

Trend Reflects Changing Insolvency and Business Restructuring

Corporate Finance & Restructuring

April 11, 2017

FTI Consulting’s latest analysis of the ASIC insolvency statistics for February 2017, notes the number of companies entering external administration neared monthly levels not seen since February 2005.

“We are continuing to see a downward trend in insolvencies. In fact, the latest statistics have shown the lowest February levels in external appointments in twelve years,” said Stefan Dopking, Senior Managing Director in the Corporate Finance & Restructuring segment at FTI Consulting.

In February 2017, 576 companies entered external administration. ASIC stats show 574 companies entering external administration in February 2005, and a matching 576 in 2004.

This month’s levels were well down year-on-year, with 804 appointments recorded in February 2016, but higher than the 396 recorded the previous month in January, which is seasonally quiet.

There have been 972 external administration appointments in 2017 to date, compared with 1,265 in 2016.

“The declining number of formal appointments is reflective of the changing landscape around dealing with financial stress. Many more companies are working closely with advisors to restructure their affairs to change debt arrangements and avoid formal insolvency,” Mr. Dopking said.

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