Ten years ago, Planet Leasing was among the first leasing companies established on the Romanian market and was also creating the first association of leasing companies. At present, the company has gone into receivership. Moreover, another 70 leasing firms are featured on the Finance Ministry's website with overdue payments to the state budget.
The situation is alarming and proves that many of the companies operating on the leasing market will be having problems in the next few years, as competition and the war of interest rates are getting fiercer.
"The Romanian market has become extremely competitive. This is not just about the arrival of those leasing companies that are affiliated to banking groups, but also about the strong development of the companies that are already present on the market," says Cornel Coca Constantinescu, chairman of the Romanian Association of Leasing Companies (ASLR).
Under the circumstances, access to financing becomes the key-element in securing the long-term survival of a leasing company. Practically, it is becoming almost impossible for a small company to compete with the leasing firms affiliated to banking groups, at least in terms of interest rates.
In fact, part of the companies that are having problems are already beginning to sell their portfolios. "We have sold 90% of our portfolio to companies such as BT Leasing Transilvania or TBI Leasing," says Sorin Ovidiu Blaga, a partner with Euro Leasing Srl, which tops the ranking of companies with debts to the state budget. At the end of April, Euro Leasing Srl owed more than 140 billion ROL to the State, according to the Finance Ministry.
"Our debts are in fact much smaller and we have been involved in lawsuits against the Romanian State for many years," says the Euro Leasing official. The company now has only three employees and all its accounts have been blocked.
According to the Finance Ministry, Planet Leasing ranks second in this top, with debts in excess of 136 billion ROL.
"We have enough properties and assets to cover the debts," says Mustafa Oral, manager of Planet Leasing. This fall, the company went into receivership, after trying to deal with all its problems last year. We also expect a capital increase of over one million euro by the end of the year. "The money will come from other activities we are carrying in Turkey, in the construction sector. We are also exploring the possibility to launch construction and trade businesses in Romania," Oral added.
The Planet Leasing official says the company will receive a 10 million-dollar financing line from an investment group in Israel, and that the company will manage to get over the situation with help from several big contracts, such as the ones with Petrom, Electrica, RAT Brasov and other companies operating in Romania. "We were the first leasing company on the Romanian market, we have been operating since 1994 and that is why we don't want to close down our business in Romania. During the last 10 years we have had contracts worth over $100 million," Oral states.
However, analysts say it is very likely that many of the leasing companies operating in Romania, especially the small ones, will close down, either by selling their portfolios or by entering default.
ionut.bonoiu@zf.ro
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