11–246MR ASIC data shows rise in insolvency appointments
Wednesday 9 November 2011
Data released today by ASIC shows a strong overall rise in companies entering external administration (EXAD) in the three months to September 2011.
Mr Adrian Brown, ASIC’s Senior Executive Leader of Insolvency Practitioners, said that each month of the September quarter saw a consistently high number of appointments, notwithstanding a decrease from August (1049) to September (991), resulting in a higher quarterly total compared with both the June 2011 quarter and the same period last year.
For the quarter to 30 September 2011, there were 2,961 EXADs compared with 2,656 EXADs in the previous quarter (+11.5%) and 2,502 EXADs for the same quarter last financial year (+18.3%).
‘We have now seen two consecutive quarters where appointments exceeded 2,600 with the quarter ended December 2008 being the only other occasion this occurred in recent times. For the calendar year to date, companies entering EXAD increased 9.6 per cent compared to the same period last year’, Mr Brown said.
ASIC statistics show that creditor-initiated court liquidations (+33.7%) and receivership appointments (+12.7%) drove the quarterly increase of 11.5% in EXAD appointments over the previous quarter. Court liquidations rose strongly in the two largest states of NSW (+42.6%) and Victoria (+34.4%).
‘The trend towards creditor-initiated court liquidations supports feedback from insolvency practitioners that they’re seeing more activity as creditors, including the Australian Taxation Office, and various workers compensation insurers, continue to tighten up on debt recovery’, Mr Brown said.
Mr Brown also noted that appointments of receivers/controllers by secured lenders increased in NSW (+ 21.5%) and remained at high levels in Queensland where the raw number of appointments (305 over the calendar year to date) were only marginally below those of NSW (310), the largest state, and above that of Victoria (282). Receivership/controller appointments were also up in Western Australia (52.3%) for the calendar year to date compared to the same period last year.
‘Feedback from the market suggests that activity in Queensland, and to a lesser extent, in Western Australia, is largely driven by property-related appointments. We understand that certain secured lenders are crystallising long-standing problem loan positions or taking control of an underlying security where other creditors initiated an external administration’, Mr Brown said.
The attachment to this advisory provides a quarter-by-quarter comparison of EXAD appointments and EXAD appointments for the September 2011 quarter by region and appointment type.
ASIC publishes monthly insolvency statistics detailing the number and type of corporate insolvency appointments and provides an analysis of the data on a quarterly basis.