RITANZ COVID-19 Insolvency Survey Shines Light On Kiwi Business Issues
Restructuring Insolvency & Turnaround Association New Zealand (RITANZ) has today revealed findings from its COVID-19 insolvency survey, which sought to uncover the views of its members and insolvency practitioners across the country.
The survey has revealed that the hospitality industry is expected to be the hardest hit over the next year, with 90% of respondents predicting a rise in insolvency appointments in that sector. This was followed closely by the tourism (88%), retail (82%) and accommodation industries (78%).
The vast majority of respondents (93%) expect that insolvency appointments will increase over the next 1-2 years and 60% expect they will rise in the next 2-3 years. In the more short-term, 83% of members reported that insolvency appointments will rise in the next 12 months.
John Fisk, RITANZ Chair, says this suggests that COVID-19 will have long-term, wide ranging impacts on Kiwi businesses as opposed to short-term knocks.
“The volume of liquidation appointments for the months of January and February this year are at the lowest levels they’ve been at since 2018. Total shareholder appointments are also significantly lower than previous years. This suggests there may be a number of ‘zombie’ businesses continuing to operate with the help of government funding, but we may see a number of liquidations in the coming years for those that are unable to repay their debts.”
Members were also questioned on what they expect to happen to insolvency appointments after the Debt Hibernation Scheme comes to an end in October 2021. Surprisingly, only half of RITANZ members (53%) reported that the volume of insolvency appointments will remain the same when the scheme concludes.
In comparing the current sentiment regarding insolvency and restructuring work to six months ago, 40% of members felt as the volume of work for restructuring, insolvency and turnaround services has remained unchanged.
The findings suggest that RITANZ members are generally feeling confident in their positions and in their firms. 77% of respondents said that they were not concerned about the viability of their job in the next six months, and 80% said that they were not concerned about the stability of their firm.
“This is the first of what we hope will become an annual survey for our members, so that we can canvas their views and the relevance they have for New Zealand business,” concludes Fisk.
- In the next 12 months, 90% of members expect to see a rise in insolvency levels and appointments in the hospitality industry. Followed by tourism (88%), retail (82%), and accommodation (78%).
- 53% of members feel that insolvency appointments will remain the same after the Debt Hibernation Scheme ends in October 2021
- 90% of members expect that insolvency appointments will increase over the next 1-2 years.
- 60% expect that insolvency appointments will increase in the next 2-3 years.
- 40% of members feel as though their work for restructuring, insolvency and turnaround services has remained unchanged in the past six months.
- 77% said that they were not concerned about the viability of their job in the next six months.
- 80% said that they were not concerned about the stability of their firm in the next six months.