The owner of construction materials AdePlast, Marcel Barbut, signals a negative situation in the lending market that many managers refuse to talk about: foreign banks are siding with the companies in their home countries over companies fully owned by Romanian entrepreneurs.
Lenders are raising interests and this will drive many firms to collapse
“Many multinational banks shore up companies from their home countries that are active in Romania, over local firms. The credit standards are much better for multinational companies”, Marcel Barbut, owner of construction material manufacturer said in an interview to Wall-Street.
Moreover, Barbut pinpoints another factor that caused the weakening of the lending activity in the corporate sector in Romania: after RoBor was doubled, the lenders are now raising their margins barefacedly and without any prior negotiation, and this will surely drive many companies to default”. And all this, Barbut added, amid a generally European trend of lowering interests in an attempt to help companies cope with the crisis, while for many Romanian companies, euro currency lending activity is now practically in a resting point.
Nearly 35-40% of the construction companies are at risk of bankruptcy if the projects in the field will not receive a prompt financing, according to Laurentiu Plosceanu, chairman of Romanian Association of Construction Entrepreneurs (ARACO).
The construction market, he added, is likely to record a roughly 80-85% downdraft from last year, or a 10% growth in the event of a prompt measure.
At a simple calculation, one-month Euribor is 1,493% plus a 3% margin, the total interest would be 4.493%. One-month Robor is 15.21% plus an equal margin of 3%, and the total interest would be 18.21%. “The interest gap is tragic, and a small company will not stand a chance to survive the crisis. It is not
