Category: press-release-2020

Investors show strong interest in Romanian, Indonesian and Vietnamese subsidiaries

8. September 2020

• Sales processes for other Asian subsidiaries to start soon

After the opening of insolvency proceedings over the estate of Wirecard Sales International Holding GmbH the insolvency administrator appointed by the Munich Insolvency Court, Dr Michael Jaffé further pursued the restructuring and sale of the international subsidiaries of Wirecard group held by Wirecard Sales International Holding GmbH.

Several investors are competing in the auction process for the acquisition of all shares in Wirecard Romania SA. The insolvency administrator expects final bids next week.

Strong interest is also shown by potential investors in PT Wirecard Technologies Indonesia, PT Prima Vista Solusi (both Jakarta, Indonesia) and Wirecard (Vietnam) Company Limited. The insolvency administrator has already received several indicative bids for these companies. Further sales processes regarding the Asian subsidiaries of Wirecard Sales International Holding GmbH will start soon.

In this context the insolvency administrator has appointed a Chief Restructuring Officer with Wirecard Asia Holding Pte. Ltd. and Wirecard Singapore Pte. Ltd. in order to lead the restructuring and sales efforts in Singapore, pending approval of the Monetary Authority of Singapore and the Ministry of Manpower.

“We are glad to see that there is interest in the market for the subsidiaries of WDSI. Therefore, we will continue our sales efforts in the best interest for WDSI’s creditors”, said the insolvency administrator Dr Michael Jaffé.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

25. August 2020

With today’s decision, the district court of Munich has opened the insolvency proceedings regarding the assets of Wirecard AG, which were applied for on 25 June 2020.

The current preliminary insolvency administrator Dr. jur. Michael Jaffé from the law firm JAFFÉ Rechtsanwälte was appointed as insolvency administrator.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

Liquidation processes are being further progressed

25. August 2020

• Business operations to be continued – Resizing of existing structures necessary – Reorganization of sustainable areas

On August 25, 2020, the Local Court of Munich opened insolvency proceedings regarding the assets of Wirecard AG and six other German Wirecard companies and appointed Dr. jur Michael Jaffé of the law firm JAFFÉ Rechtsanwälte as insolvency administrator. As a result, the power of disposal over the assets of the insolvent companies is transferred to the insolvency administrator.

This also marks the end of the insolvency payment period meaning Wirecard AG and the other insolvent companies will have to generate and pay their own wages and salaries again from this date. At the time of filing for insolvency at the end of June 2020, no liquidity was available for this purpose. Under the preliminary insolvency administration, it has since been possible to stabilize the ongoing business and create a basis for its continuation.

However, with the opening of the insolvency proceedings, the existing structures will have to be resized. The cash burn rate at the time of filing for insolvency was enormous, so that urgent action is needed. The company had stacked up resources for a supposed growth and had created considerable overcapacities by acquiring numerous companies whose integration had not or only slowly been pursued. These factors led to high losses and to a significant disproportion between the available resources and those actually required on the group level.

Against this background, far-reaching cuts are therefore necessary in order to make any kind of continuation possible and to maintain the option of exploiting Wirecard AG’s core business, the so-called acquiring and issuing business. As a result, terminations need to be made both with regard to the infrastructure (real estate rental and leasing contracts) and for around 730 employees. As a result however, 570 members of staff (350 thereof in the insolvent entities and 220 in the solvent Wirecard Bank AG) are able to remain in employment in Aschheim. The Management Board contracts will also be terminated due to insolvency.

“The economic situation of Wirecard AG was and is extremely difficult in light of the lack of liquidity and the well-known scandalous circumstances. The usual restructuring and cost-adjustment measures are therefore not sufficient, as such a massive loss situation is not feasible at full cost in the insolvency proceedings. Accordingly, the number of employees and all other cost positions at all insolvent companies have to be adjusted to the corporate reality. In the sales process for the core business, which also includes the solvent Wirecard Bank AG, we are currently in negotiations with several well-known interested parties regarding an acquisition. The proceeds from the sale will benefit the creditors,” emphasized insolvency administrator Dr. Michael Jaffé.

In addition, the investor processes for the independent international affiliates are moving quickly. A few days ago, an agreement on the sale of Wirecard Brazil S.A. was signed. The sales process for the subsidiary Wirecard North America Inc. is also well advanced. The liquidation processes for the other Wirecard affiliates worldwide are also making progress.

Examination of damage claims – creditors meeting on November 18, 2020

Parallel to the liquidation processes, the events that led to the insolvency are also being investigated. However, in view of the enormous volume of data and payment transactions to be checked, the examination of any liability claims resulting from unauthorized actions or breaches of duty will take some time. All promising and recoverable claims for damages will be pursued by the insolvency administrator.

On November 18, 2020, the first creditors’ meeting, the so-called report meeting, will take place. As things currently stand, this first creditors’ meeting is to take place in person in the Löwenbräukeller in Munich. However, due to Covid-19 hygiene regulations, the number of participants will be limited, according to the guidelines of the Bavarian government. The report meeting is not public and is therefore only open to the insolvency creditors. Nonetheless, these creditors can also provide written authorization for a representative to attend. However, only one authorized representative per creditor is admitted if other creditors would otherwise not be able to attend. The participation of the creditors is not mandatory. The insolvency administrator will provide the creditors with a written report, which will also be available in the creditor information system.

With the opening of the insolvency proceedings, the creditors of Wirecard AG as well as of the insolvent Wirecard Technologies GmbH, Wirecard Issuing Technologies GmbH, Wirecard Service Technologies GmbH, Wirecard Acceptance Technologies GmbH, Wirecard Sales International Holding GmbH and Wirecard Global Sales GmbH can now also file their claims for the insolvency table in the respective proceedings with the insolvency administrator. The competent Munich Local Court set a deadline for this purpose of 26.10.2020. The insolvency administrator will send the known creditors a form for filing their claims. It is also available for download at www.jaffe-rae.de.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

Agreement on the sale of Wirecard Brazil signed

21. August 2020

• Negotiations with several bidders regarding the sale of the core business in the second round
• Final offers for Wirecard North America expected

The first results regarding the sale of assets have been achieved in the preliminary insolvency proceedings over the assets of Wirecard AG. In this regard, an agreement on the sale of Wirecard Brazil has now been signed. Pursuant to the signed agreement, 100 percent of the shares of Wirecard Brazil shall be acquired by a subsidiary of PagSeguro Digital Ltd., a company listed on the New York Stock Exchange. The transaction is still subject to, among others, the approval of the Brazilian regulatory authorities.

The sales process for the subsidiary Wirecard North America Inc. is also well advanced. The final acquisition offers are expected here shortly.

For the core business of Wirecard AG, the so-called acquiring and issuing business, negotiations with potential investors are now entering the next phase. “There are several notable interested parties who have submitted indicative offers,” explained the preliminary insolvency administrator Dr. jur. Michael Jaffé of the law firm JAFFÉ Rechtsanwälte Insolvenzverwalter.

The liquidation processes for the other Wirecard affiliates worldwide are also making progress.

“It is particularly pleasing that the sale of Wirecard Brazil has been the first success with respect to the sale of assets, because the framework conditions of the Wirecard insolvency proceedings have been, and still are, very difficult. We are glad that a satisfying solution has been found so quickly in this process. The proceeds from the sale will benefit the creditors”, said Dr. jur. Michael Jaffé.

The English subsidiary of Wirecard AG, Wirecard Card Solutions Ltd., has also reached an agreement in principle with Railsbank Technology Limited to sell certain customer relationships and other assets. Wirecard Card Solutions is active in the field of prepaid cards and electronic payment transactions.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

A total of over 140 interested parties for core business or affiliated companies

24. July 2020

• Business operations continue – liquidity secured

Despite the extremely difficult starting position and the lack of liquidity at the beginning of the proceedings, the preliminary insolvency proceedings for the assets of Wirecard AG are continuing to progress well. Liquidity for the continuation of the business has been secured for the time being. The initiated investor processes are making good progress.

This applies particularly to Wirecard North America Inc. where around 60 interested parties have signed confidentiality agreements. Numerous management presentations have already been held in recent days, and bidders were also able to obtain information in virtual data rooms. In the next few weeks, the final phase of the liquidation process will commence, during which the bidders will be able to submit concrete acquisition offers. “The feedback from the management presentations is very positive. Interested parties are showing considerable interest in acquiring the company, which operates independently on the market,” said the preliminary insolvency administrator Dr. jur. Michael Jaffé of the law firm JAFFÉ Rechtsanwälte Insolvenzverwalter.

In addition, the core business, so-called acquiring and issuing, continues to operate and is also being offered to investors for acquisition. “Also, thanks to the great commitment of many employees, the business has further stabilized despite the massive turbulence triggered by past events. 77 interested parties have already signed confidentiality agreements. We are confident of finding an investor for the core business, which offers considerable entrepreneurial opportunities in an enormously growing market,” explained Dr. jur. Michael Jaffé.

In addition, numerous liquidation processes are being initiated for the other global affiliates which can be sold independently of the core business.

More than 1,500 employees of the insolvent companies receive pre-financing of insolvency funds

7. July 2020

• Constructive discussions with customers

The sales processes for the insolvent Wirecard AG’s core business, the acquiring and issuing business, as well as the independent business units of the Group companies worldwide have been launched. Following a further meeting of the preliminary creditors’ committee of Wirecard AG, the preliminary insolvency administrator, Dr. jur. Michael Jaffé of the law firm JAFFÉ Rechtsanwälte Insolvenzverwalter, announced that more than 100 parties have already registered interest.

After signing a confidentiality agreement, potential investors will soon be able to obtain information via newly established, virtual data rooms and start due diligence processes. The aim is to find near-term investment solutions in the interest of creditors, employees and customers.

Activities for the US company Wirecard North America are the most advanced. The international investment bank Moelis & Company has already been mandated to support the sale of this company with the approval of the preliminary creditors’ committee. Investor processes are also currently being initiated for other international affiliates as wellas the core business, acquiring and issuing.

During discussions with customers, the majority have taken a constructive stance and expressed great interest in an investment solution to the insolvency being found quickly.

At the same time, ongoing costs are being further reduced. “We have already implemented cost-cutting measures. The insolvency funds for the more than 1,500 employees of the insolvent companies are currently relieving the liquidity situation. The employees will receive their first salary payments in a few days, as the pre-financing of the insolvency funds is already underway,” said the preliminary insolvency administrator Dr. jur. Michael Jaffé.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

5. July 2020

In agreement with its shareholder, Wirecard AG, and its preliminary insolvency administrator, the management of Acquiring & Issuing GmbH has commissioned the US investment bank Moelis & Company to oversee the sales process of Wirecard North America. Sales processes are currently being prepared for further subsidiaries of Wirecard AG.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

International investor process launched

30. June 2020

• Creditors’ Committee unanimously confirms Dr. jur. Michael Jaffé as the preliminary insolvency administrator of Wirecard AG

The Munich Local Court has appointed a preliminary creditors’ committee in the preliminary insolvency proceedings relating to the assets of Wirecard AG by order of June 29, 2020. At its constitutive meeting today, the preliminary creditors’ committee unanimously confirmed Dr. jur. Michael Jaffé from the law firm JAFFÉ Rechtsanwälte as the preliminary insolvency administrator. The preliminary insolvency administrator, who was appointed by the Munich Local Court also on 29 June 2020, presented an initial report at the meeting, which lasted several hours. According to this report, numerous interested parties worldwide have already expressed their interest in acquiring business units. The preliminary creditors’ committee then gave the go-ahead for an international investor process involving investment banks.

The primary objective of the preliminary insolvency proceedings is to stabilize the business operations of the Group companies. This applies to the processing of credit card payments as well as to the other business areas, which are to be regarded independently. To this end, intensive discussions are being held with customers, trading partners and the credit card organizations. However, it still cannot be ruled out that insolvency applications will also have to be filed for subsidiaries of the Wirecard Group with the aim of placing these companies under the protection of insolvency proceedings and, if possible, continuing them.

Wirecard Bank AG is still solvent; payouts to merchants and customers of Wirecard Bank are being carried out without restrictions.

Early in the morning of June 30, 2020, the British Financial Conduct Authority (FCA) lifted the restrictions initially imposed on the subsidiary Wirecard Card Solutions Ltd. after Wirecard AG had filed for insolvency. This means that several hundred thousand accounts are now once again open for the processing of payments. Customers can use their related (credit) cards as usual.

The respective business units and/or Wirecard AG are in close contact with the supervisors of the other licensed units abroad, likewise with the aim of continuing business while simultaneously safeguarding customers.

Press contact for the insolvency administrator
Sebastian Brunner
Tel.: +49175/5604673
E-Mail: sebastian.brunner@brunner-communications.de

27. June 2020

As announced on Thursday, 25 June 2020, the Management Board of Wirecard AG has filed an application for opening of insolvency proceedings on behalf of Wirecard AG with the competent Munich Local Court. With the filing of the insolvency application, Wirecard’s business activities will be continued. The Management Board is of the opinion that continuation is in the best interests of the creditors.

As a first step, the court has commissioned the Munich lawyer Dr. Michael Jaffé as an official expert. Whether insolvency proceedings will be opened is still under review. The Management Board of Wirecard AG expects a provisional insolvency administrator to be appointed for Wirecard AG shortly.

The business operations of the Group companies (https://www.wirecard.com/conta… ) including the licensed units are currently ongoing. The parent company performs some central functions for the subsidiaries. As previously reported, it is being continuously reviewed whether insolvency applications also have to be filed for subsidiaries of the Wirecard Group. With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present.

Wirecard Bank is currently not part of the insolvency proceedings. The electronic funds transfer of Wirecard Bank are not affected. Payouts to merchants of Wirecard Bank will continue to be executed without restrictions. Further information on Wirecard Bank AG can be found at www.wirecardbank.com. The licensed legal entities, and where appropriate, Wirecard AG, remain in close contact with the respective regulators. Furthermore, we are in constant contact with the credit card organizations.

Wirecard Card Solutions Limited, headquartered in Newcastle, UK, has suspended its business operations due to an order issued by the competent supervisory authority, Financial Conduct Authority. The company has discussed measures with the authorities. The measures are being undertaken and will hopefully enable it to continue operations.

The TPA business in question is still under review. The newly appointed CEO of Wirecard AG, James H. Freis, Jr., took a new approach to investigating the known allegations immediately upon taking office. Among other measures, a number of new advisors were commissioned to ensure neutrality and, in particular, independence from the former Management Board members of Wirecard AG. The clarification efforts will, of course, continue even after the filing of the application for the opening of insolvency proceedings.