A new buyer or the insolvent Wirecard Group

Mona Hetzel
November 17, 2020

For the insolvent Wirecard Group a buyer was found

The major Spanish bank Santander takes over the core business of the payment processor Wirecard. The technology and business operations will be taken over, as will the 500 remaining employees. On Wednesday, the first meeting of creditors will take place, at which insolvency administrator Michael Jaffé will report on the current situation of the former DAX Group.Ex-manager Braun is due to testify before the Wirecard investigative committee of the German Bundestag this week.Braun and Co. are said to have inflated Wirecard's balance sheets for years with phantom deals in the Middle East and Southeast Asia in order to obtain loans from banks and investors. The Munich public prosecutor's office accuses the accused managers, such as the fugitive former CFO Jan Marsalek, of commercial gang fraud.On the one hand, the Austrian manager is a prime suspect accused by the public prosecutor's office, and on the other hand, he himself has suffered immense losses: two years ago, Braun was still a billionaire thanks to his shareholding - which has now been largely sold. In the meantime, only a fraction of this is left. And in all probability, the manager will not be left with any of that either, as Braun is confronted with numerous lawsuits and claims for damages.The media are reporting that the parties have allegedly agreed on a purchase price of 100 million euros. However, Jaffé and Santander have agreed to maintain silence. The deal should be finally closed by the end of the year.Santander takes over the core business.

Just under three months after the formal opening of insolvency proceedings, Santander is thus taking over the Wirecard technology platform for payment services, the assets and personnel required for this purpose, Santander states. The majority of the remaining Wirecard employees and the platform are to become part of Santander's merchant service team, but will be able to remain at their current jobs.However, the Wirecard companies will not be taken over. In order to avoid Santander having to assume the debts and legal risks, the Group will not take over the various Wirecard companies, such as the subsidiaries Wirecard Technologies and Wirecard Acquiring and Issuing, as well as the Wirecard Bank. The bank is to be wound up step by step in close coordination with the financial supervisory authority Bafin.

Prior to this, Jaffé had already sold the former Wirecard subsidiary in the U.S. and further companies in Brazil and Romania; according to information from financial circles, total proceeds to date amount to half a billion euros. These proceeds will benefit the creditors. According to the insolvency administrator, further sales are planned in Asia, South Africa and Turkey.That Jaffé can remove the mountain of debt, which the former chairman of the board Markus brown sitting in remand and its alleged accomplices left behind, is considered however as very improbable. According to calculations by the Munich public prosecutor's office, banks and investors have presumably lost more than three billion euros. The presentation of the insolvency administrator at the creditors' meeting in Munich's Löwenbräukeller is eagerly awaited. So far it is unknown how high the registered claims of the creditors are. It is also unknown how much of the lost billions can possibly be saved.

In addition to the three billions lost as mentioned by the investigators, there are the immense losses in the price of the Wirecard share. In September 2018, the company was worth more than 23 billion euros on the Frankfurt Stock Exchange; at present, the figure is less than 100 million.

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