May External Administrations See Biggest Jump in Insolvencies in 2017
Insolvencies Kept at Bay Year-On-Year Due to Business Restructuring and Rehabilitation Practices
FTI Consulting’s latest analysis of the ASIC insolvency statistics for May 2017 notes the number of companies entering external administration reached its highest number for the year but the number of corporate failures continued to decline year-on-year.
In May 2017, there were 792 companies entering external administration, markedly up from 590 the previous month, and up on the previous highest month of March 2017 at 745. May’s levels were also up year-on-year, with 735 appointments recorded in May 2016.
However, the business restructuring practices of the past 12 months has meant there have been 3,099 external administration appointments for the first five months of 2017, still down compared with 3,634 in the first five months of 2016.
Kelly Trenfield, Senior Managing Director in the Corporate Finance and Restructuring segment at FTI Consulting, said:
“Prior to the release of this month’s analysis, the level of corporate failures in 2017 was at its lowest level in four years, with that pattern set to continue.
However, while general insolvency activity continued to be more subdued against the same period last year, it is apparent the economic buoyancy that has been enjoyed for a long period of historically low interest rates has dissipated.”