The overhaul of Bulgaria's economy in its third crisis year will lead to bankruptcies and consolidation of business, managers of local employers' organisations said on January 17 2011.

"2011 will be a year of healing bankruptcies. Many companies have so far delayed the suspension of their businesses at all costs, but it looks like it will happen this year," chairman of the Confederation of the Employers and Industrialists in Bulgaria (CEIBG), Ognyan Donev, said.

Companies forced to terminate their operations in 2011 will be also entities with "shattered economic health, not acquired by their rivals," he said.

Bozhidar Danev, who chairs the Bulgarian Industrial Association (BIA), said the highest risk of insolvency would threaten the construction sector due to the significant amount of risk capital poured into the industry during the property boom.

According to Registry Agency data, the number of insolvencies in 2009 was 30 per cent higher than a year previously, while the court declared bankrupt 312 firms.

Meanwhile, economists said that closure of companies or acquisitions by rivals will be seen in all sectors, a trend to be fuelled not only by stagnation of the economy, but also by the continuing decline in turnovers, Lachezar Bogdanov, an analyst with Industry Watch.

Bankruptcies and business consolidation will be mainly seen in construction and related industries, but the process will also hit other sectors such as trade, tourism and transportation, Bogdanov said.

Source: Dnevnik.bg