More than 100 potential suitors signal appetite for parts of Wirecard

More than 100 potential bidders have flagged their interest in buying parts of insolvent German payments group Wirecard, the company’s administrator said on Tuesday. 

Munich-based lawyer Michael Jaffé has been appointed to oversee proceedings after the once high-flying group collapsed into insolvency last month in one of the biggest accounting frauds in Germany’s post-war history.

The company, which is sitting on €3.5bn of debt, disclosed in June that large parts of its business in Asia — which was outsourced to external partners and accounted for half of the reported group revenue — were misrepresented to investors. Wirecard also warned that €1.9bn in cash was missing from its accounts.

Mr Jaffé said on Tuesday that he had taken steps to “secure [Wirecard] assets at different international locations” and that a team of specialists was analysing its payment flows in an attempt to uncover the causes of the company’s crisis.

Shares in Wirecard, which for a long time was seen as one of Germany’s most successful start-ups, have collapsed by more than 98 per cent since mid-June, wiping out more than €12bn in stock market value.

Deutsche Bank has emerged as one of the potential suitors of Wirecard’s payments processing business. Last week, it said it was willing to provide financial support to Wirecard Bank, which is not part of the insolvency procedure and is processing payments as normal. 

Deutsche’s chief executive Christian Sewing on Tuesday said that it was “almost an obligation” for Germany’s largest lender to look at Wirecard Bank, given Deutsche’s focus on transaction banking and payments. “We all now need transparency and that’s the first task,” said Mr Sewing in a webcast organised by Bloomberg News, adding that it was “too early to judge” how Germany’s largest lender may get involved.

With regard to potential divestments, most progress has been made with Wirecard’s US-based subsidiary, Wirecard North America, the administrator said. The former Citi Prepaid Card Services business, which was bought by the German company for an undisclosed sum in 2016, has put itself for sale and mandated investment bank Moelis & Company to manage the process. 

Additional sales procedures for other international subsidiaries, as well as for Wirecard’s core business, the settlement of electronic payments in Europe and the issuing of credit cards, “are currently being launched”, said the administrator. 

Soon potential suitors will be able to begin conducting due diligence, he added. The aim was to come to “timely solutions with investors in the interest of creditors, employees and clients”.

The Financial Times reported on Monday that Wirecard’s core business outside Asia, which is not directly affected by the accounting fraud, has been loss-making for years, according to internal numbers outlined in an appendix to KPMG’s special audit into Wirecard’s accounting.