Wirecard’s insolvency administrator sells American subsidiary
The German payment processor’s North American business was never properly integrated. This turns out to be an advantage in bankruptcy. The buyer of this area, which is considered valuable, is a financial investor
Dhe North American business of Wirecard has been sold. The insolvency administrator of the payment processor, Michael Jaffe, awarded the contract for Wirecard North America on Thursday to the holding company Syncapay, which is financed by financial investors. Both sides announced this late on Thursday evening. “With this transaction, we have reached an important milestone in realizing the assets of Wirecard AG in the best interests of the creditors,” said Jaffe. The takeover of Wirecard North America is being financed by the renovation specialist Centerbridge, who will become the majority owner of Syncapay. The company from Dallas in the American state of Texas, in which Bain Capital has held shares so far, already owns the payment processor daVinci Payments.
Never properly integrated
Wirecard North America is considered to be one of the most valuable parts of the group from Aschheim near Munich, which collapsed in a balance sheet scandal. Wirecard took over the company from the major bank Citi in 2016. Wirecard North America mainly issues prepaid credit cards. The subsidiary was never properly integrated into the rest of the business – in insolvency, extensive independence turns out to be an advantage. With the takeover, the previous Wirecard subsidiary is to be renamed North Lane Technologies – after the street on which it was founded in Philadelphia in 1997.
It is the second major foreign subsidiary of Wirecard that Jaffe has sold. The Brazilian subsidiary goes to the payment service provider PagSeguro, which is listed on the American technology exchange Nasdaq.
The insolvency administrator is still looking for a buyer for the German core business. The major Spanish bank Santander and the British Lycamobile are traded as promising bidders. Because the – non-insolvent – Wirecard Bank is to be sold together with its core business, the processing and security of payments via credit cards on the Internet and at tills, the financial supervisory authority BaFin also has a say. However, this is dragging out the process.
Wirecard had to file for bankruptcy at the end of June after 1.9 billion euros turned out to be non-existent on the balance sheet. According to the Munich public prosecutor’s office, the Wirecard managers have artificially inflated the balance sheet with air bookings in Asia over the years and thus concealed losses in their core business. Banks and investors alone have been cheated by more than 3 billion euros. Ex-CEO Markus Braun is in custody, board member Jan Marsalek is on the run and is wanted worldwide.