Record number of Czech firms file for bankruptcy

PRAGUE, July 13 (Reuters) - A record number of Czech companies filed for bankruptcy in the first half of 2009, research by credit agency Creditreform showed on Monday.

Czech export-oriented firms are suffering as demand for their mainly industrial goods such as vehicles and steel products has fallen by almost a quarter due to the evaporation of orders from the recession-hit euro zone.

Another problem is stricter bank lending rules, which has severely cut the flows of credit to companies. In June, a study by Czech Chamber of Commerce unveiled 76 percent of firms had to cut production due to a lack of financing.

In the first half of this year, 4,021 companies filed for bankruptcy, far above the 2,551 filings in the same period a year ago, the research showed.

June saw a total of 891 filings, the highest number of petitions submitted within a single month.

"It can be expected that by the end of August the number of filed corporate bankruptcy proposals will equal the number for the whole of 2008," the credit agency said.

A total of 5,359 institutions filed for bankruptcy in 2008, Creditreform said.

From the filings received in the January-June period 1,591 companies had been declared bankrupt so far. More than half of the submissions were rejected because the companies had no assets to distribute among creditors.

First quarter GDP shrank by a record 3.4 percent year on year and poor industrial output reading on Monday pointed to expectations for another miserable quarter. [ID:nLD460891]

Creditreform Czech Republic is a member of Creditreform International, which groups country offices in 20 European states and China. (Reporting by Jana Mlcochova, editing by Mike Peacock)