Friday, 26 April 2024
Wirecard seeks insolvency protection amid $2 billion accounting scandal
The Management Board of Wirecard AG decided today to file an application for the opening of insolvency proceedings on behalf of Wirecard AG at the competent Munich Local Court due to the threat of insolvency and over-indebtedness. It is being examined whether insolvency applications must also be filed for subsidiaries of the Wirecard Group.
Wirecard AG in the normal course of business has drawn upon credit from financial institutions. Wirecard AG has conducted negotiations with the lending institutions, taking into account recent developments. In the absence of an agreement with the lenders, there was a likelihood of termination and expiry of loans with a volume of EUR 800 million on June 30, 2020, and EUR 500 million on July 1, 2020.
The Management Board has come to the conclusion that a positive going concern forecast cannot be made in the short time available. Thus, the company's ability to continue as a going concern is not assured.
Wirecard Bank AG is not part of the insolvency proceedings of Wirecard AG. BaFin has already appointed a special representative for Wirecard Bank AG. In future, the release processes for all payments of the bank will be located exclusively within the bank and no longer at Group level.
With this step, Wirecard AG wishes to protect the appropriate interests of all parties involved with the company, including creditors, customers and employees.
The company will continue to pursue possible chances of reorganization in coordination with the temporary insolvency administrator to be appointed by the insolvency court.
Re-disseminated by The Asian Banker
