SOME 40 percent of all businesses operating in the Balearics risk going into receivership over the next 12 months, the highest number in Spain, said industry watchdog Iberinform yesterday,.

It claimed that the data puts the Islands in the “eye of the economic storm” and that the region was in a “very different situation” to other parts of Spain where the national average risk of going broke applies to 9.6 percent of companies, less than in 2008 when it stood at over 10 percent.

Iberinform's research showed that the Balearics led the risk ratings by a long shot, quoting as well the other end of the scale where the likelihood of receivership in regions like Navarre, Catalonia, Madrid and The Canary Islands stands at 2.4, 7.2, 7.6 and 12.5 percent respectively.

The calculations of business risk published in June were made using complex mathematical formulae to provide a 12-month view of those companies which have a 70 percent or higher probability of going into receivership within a year. Responding to the results of the forecast, Catalan business expert Pere J. Brachfield said that “the Balearics are totally off the map.” These were not the only statistics that worried Brachfield. He said that the Balearics currently has the second worst record in the country of settling bills to suppliers - 140 days on average, just slightly ahead of Andalucia where businesses take 150 days to settle invoices and 20 days more than the Spanish national average of 120 days. Brachfield, who is director of the Risk Study Centre, claimed that the longer the period required to pay invoices, the greater the risk that exists of going broke. He added that the Iberinform report shows that companies in the Balearics have a risk “four times” higher than the national average of going broke.

The Balearics, he said, is also the region of Spain which has the third worst record for unpaid bills.


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