Corporate bankruptcies are on the rise due to the spread of the new covid-19. According to Tokyo Shoko Research, there were a total of 100 Covid-related bankruptcies on March 27. The lodging and restaurant industries, such as inns, account for about 40% of the total, and many cases of cash-strapped companies going bankrupt.
Tokyo Shoko Research tabulated the number of companies that were legally liquidated or suspended from business between February and April 27 due to the effects of the new covid-19 This includes during the preparation of legal proceedings. On an aggregate basis, there were two cases in February, 23 cases in March and 75 cases in April.
Of the total 100 cases, 21 were in the lodging industry, such as hotels and inns, and 15 were in the restaurant industry, accounting for about 40% of the total. If retail is included, the figure is 50 percent. The voluntary restraint on going out has hit the tourism industry hard, causing a succession of cancellations of guests, forcing performance to fall short of plans.
On the 27th, WBF Hotel & Resorts (Osaka City) applied to the Osaka District Court for the application of the Civil Rehabilitation Law. The company’s total debt is about 16 billion yen, making it the largest Covid-19-related bankruptcy, according to Tokyo Shoko Research. The company had been relying on bank loans for a large amount of money to open a hotel, etc., so the interest burden was heavy and they were stuck with cash flow.In Japan.
As for the annual number of bankruptcies in 2020, Mr. Mitsuhiro Harada of Tokyo Shoko Research expects the number of bankruptcies to reach 9,000 to 10,000, “depending on how quickly you can get financing,” he said. If the number of corporate bankruptcies exceeds 10,000 in 20 years, it will be the highest level since 13 years.