We interviewed Alexandra Bigot, Partner in Restructuring at Latham & Watkins Paris so that she draws up an assessment for the readers of Le Figaro.
The health crisis started more than two years ago. What is the situation of French companies? Is the number of bankruptcies alarming?
Paradoxically, the number of insolvencies in France in 2021 is extremely low, the lowest for 35 years and the lowest in the euro zone.
Is the number of bankruptcies the most revealing or do other data seem more relevant to you?
The same applies to the number of jobs affected by collective proceedings.
While in 2019, around 174,000 jobs were affected by business failures, they were less than 100,000 in 2021.
In such a context, has the increase in prevention had the expected effects?
The increase in prevention procedures is indeed logical and is explained by the exceptionally protective measures put in place by the legislator to provide a response to the pandemic.
Despite the health crisis, which affects many sectors of industry, how can the historically low number of bankruptcies be explained?
The low number of defaults is mainly due to massive support from the French state and banks.
Companies have benefited from more than 200 billion euros in financial aid under PGEs, the solidarity fund and partial unemployment.
The continuous adaptation of the legal framework, with the adoption of new tools, has also made it possible to support companies during the most difficult period.
Finally, the particularly low rates allowed an influx of liquidity on the markets, which benefited large companies.
Alexandra Bigot, Restructuring Partner at Latham & Watkins Paris
Latham & Watkins Paris
Are some sectors not more impacted than others?
Three types of sectors particularly affected by the crisis can be distinguished:
● sectors that were already in difficulty and for which the pandemic was the final blow.
This concerns, for example, textile brands or certain restaurant chains;
● the sectors directly impacted by the containment measures: events and tourism in particular;
● industrial sectors impacted by the second wave effect of Covid-19, faced with supply difficulties and an unsustainable rise in their costs, such as automotive, construction, metallurgy, glass or paper.
How do you see the future of
restructuring
?
And, more specifically, how do you envision the future of your business?
Our job is to find a positive outcome to crisis situations.
Whether we advise companies, shareholders, investors or creditors, the objective is the same: to sustain activity and jobs, to recreate value, by using existing legal tools in the most efficient way.
Late 2021 saw a major reform of distressed business law for large companies.
It creates new opportunities, leads to new strategies, subjects on which our team has been involved since the beginning.
2022 is going to be a crucial year for some companies: two-thirds of PGEs will start to be reimbursed, while the rise in costs continues and interest rates rise.
