Out-of-court debt settlement mechanism to be overhauled

The out-of-court settlement mechanism for corporate debts to banks has been an unqualified failure, as only 24 enterprises have so far entered into an arrangement for their dues with their creditor banks.

They are all companies with debts to just one bank, as the mechanism has completely failed to address businesses with debts to more than one bank: Credit sector data show this category contains 127 firms, which may have agreed on some sort of settlement for their arrears, but none of them has yet signed a contract regarding such an arrangement.

Development and Investments Minister Adonis Georgiadis acknowledged on Thursday the failure of the mechanism, announcing that the law will be overhauled so that it becomes an instrument to save corporations that are sustainable. The issue will be the focus of cooperation between the Independent Authority for Public Revenue and...