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BANKRUPTCY

Retailers fear impact of cash firm liquidation

News that bankrupt cash transport firm Panaxia will face immediate liquidation has sent shock waves through the Swedish retailing industry, sparking fears about the negative impact the company's demise will have on Sweden's cash handling industry.

Published: 25 September 2012 16:22 CEST
Retailers fear impact of cash firm liquidation

“The fact that it is happening so fast makes it impossible for shops and clients to adapt to the new situation. This isn’t like transporting tomatoes, there are security demands that need to be met,” security expert Per Geijer of Swedish retailing employers’ organization Svensk Handel told The Local on Tuesday.

The comments come after Panaxia’s bankruptcy administrator Lars-Henrik Andersson issued a statement on Tuesday declaring his intention to halt attempts to sell the bankrupt firm. This means the company’s assets will go straight into liquidation.

“There is not enough interest in buying Panaxia. And it isn’t justifiable that the administrators keeps the company going,” Andersson told Sveriges Radio (SR) on Tuesday.

Cash transport firm Panaxia filed for bankruptcy on September 5th after a rocky financial year.

Two of the company’s top managers had been arrested in April this year. In June, the Swedish debt enforcement agency (Kronofogden) seized around 35 million kronor ($5.3 million) in assets, but the two suspects were later released, although the suspicions remained.

The company had also been struggling to keep afloat after a reported loss of quarter of a billion kronor.

Two days after the bankruptcy, Panaxia’s board contacted the Economic Crime Authority (Ekobrottsmyndigheten), saying that large sums of money seemed to have disappeared from a company account.

Last week the Economic Crime Authority confirmed that formal charges of aggravated accounting fraud will be filed later in the autumn against two former Panaxia managers.

At the moment, retailers are facing two major problems caused by the Panaxia demise, according to Geijer.

On the one hand, there is the missing money which is going to make it hard for many of the affected shops to survive.

On the other, there is the difficulty in transporting any cash, which is now making the organization recommend the usage of card over cash.

“With no way of transporting cash there is an added risk of thefts and robberies that we had so far been trying to avoid by using cash transport services,” Geijer said.

According to Geijer, the situation is having a negative impact on the whole of the cash handling industry in Sweden and the best scenario would be if funds could be found to guarantee that the company could continue to operate for a transitional period of two months or so

“Then retailers would have had time to find an alternative service and to enter into new agreements,” said Geijer.

He added that a slower liquidation process would allow more time for a strong buyer to appear that could take over Panaxia’s operations.

“Although that doesn’t look likely at the moment,” he told The Local.

Rebecca Martin

Follow Rebecca on Twitter here.

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BANKRUPTCY

Half of Swiss hotels, restaurants risk bankruptcy: employer group

Nearly half of Switzerland's restaurants and hotels risk bankruptcy within months failing financial support to weather devastating Covid-19 measures, the sector's employer group warned Sunday.

Published: 11 January 2021 08:00 CET
Half of Swiss hotels, restaurants risk bankruptcy: employer group
Closed restaurants face bankruptcy in Switzerland. Photo by AFP

The Swiss government is expected this week to extend the closure of bars, restaurants and leisure facilities across the country until the end of February to control stubbornly high coronavirus case and death numbers.

But industry federation GastroSuisse warned in a statement that if done  without providing significant financial support, around half of businesses in the restauration and hospitality sector could go belly-up by the end of March.

The group polled around 4,000 restaurant and hotel owners, and determined that 98 percent of them already are in urgent need of financial support.

“The very existence of many of them is threatened,” GastroSuisse president Casimir Platzer said in the statement.

While restaurants and other businesses quickly received financial support when Switzerland went into partial lockdown during the initial wave of infections, GastroSuisse has complained that support during subsequent sporadic closures has lagged.

Before the crisis, more than 80 percent of Swiss restaurants and hotels were in a good or very good position of liquidity, the study showed.

But that situation quickly deteriorated.

In October, as a second wave of infections picked up steam, the organisation cautioned that 100,000 jobs were at risk.

And during the final two months of 2020, nearly 60 percent of restaurant and hotel establishments were forced to conduct layoffs for a second time, it said.

Without government intervention, a third wave of layoffs is looming, Platzer warned.

The latest closures were to be lifted on January 22, but the government said last week it wanted to extend the deadline for a further five weeks.

GastroSuisse said the final announcement, due Wednesday, needed to be
accompanied by “immediate and uncomplicated” financial support to the sector
to avoid “disaster”.

USAM, a union that represents small and medium-sized businesses in Switzerland, called Sunday for the government not to prolong or tighten measures, warning it was an “existential question” for many of its members.

Switzerland, a country of 8.6 million people, is currently registering around 4,000 Covid-19 cases a day and had by Friday seen nearly 476,000 cases and 7,545 deaths since the start of the pandemic. 

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