The March 2011 triple disaster of earthquake, tsunami and nuclear reactor meltdowns has led to 1,485 Japanese company bankruptcies over the past three years, 3.8 times more than the 394 firms that went under over three years as a result of the 1995 Great Hanshin Earthquake, according to a credit research agency.
Teikoku Databank reported many firms were hit by indirect factors, such as deterioration in consumer sentiment or disrupted distribution networks, rather than by direct disaster-caused damage to their business facilities.
The 2011 disaster affected a wider area than the Hanshin quake, and many companies gave up their businesses even after resuming operations, the research firm added. While the pace of business failures is slowing, it will likely be at least two or three more years before the series of bankruptcies related to the disaster eventually finishes, it said.
“Many companies were about to get out of cashflow problems thanks to a law to grant a debt repayment moratorium for small and mid-size companies. But they ended up failing as their clients were taken away by their rivals before they could resume business,” said a Teikoku Databank official. “Even now, around 25 companies go belly-up each month.”
Total debts of the collapsed firms amounted to 1,462.7 billion yen (JPY), 13 times more than the JPY112.6bn in unpaid business debts after the 1995 disaster that ravaged Hyogo Prefecture and surrounding districts in western Japan.
Business failures after the 2011 triple disasters also affected 21,262 employees, according to Teikoku Databank.
Of the 1,485 failures, 142 resulted from the nuclear disaster at the Fukushima Daiichi power plant in Fukushima Prefecture. More than 80% of these companies suffered from rumors about the safety of their products in the wake of the radiation leak.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Tim de Knegt, strategic finance and treasury manager for the Port of Rotterdam, discusses how he is using blockchain, the challenges he will face in his role of treasury over the next 12 months and the advice he would give to someone starting out their career in treasury.
Due to the low interest rate environment and Basel III regulation many corporate treasurers, who may have in the past been very reliant on the banking sector to provide them with cash management solutions, have been forced to explore alternative options as banks have been refusing short dated cash deposits.