Wirecard AG
JPMorgan Distressed Debt Desk Buys €110M of Wirecard RCF at 16
Mon 01/09/2023 08:06 AM
The distressed debt desk of JPMorgan bought €110 million of Wirecard’s €1.75 billion RCF at about 16 just before Christmas, sources told Reorg.
Bids for the debt were in the 13-14 region until the buyer increased its offer, sources added.
According to one source, the buyer, who wasn’t already involved in the German payment systems company’s RCF, may consider selling the debt piece to investment funds.
As reported, at the end of November a Munich court ruled that shareholder claims for damages as a result of misleading statements made by Wirecard cannot be added as insolvency claims ranking pari passu with other creditors. The court said these damages cannot be considered insolvency claims.
Sources told Reorg, the administrator has recovered more than €700 million as of December and there could be further recovery of funds from the guarantors of the debt.
Wirecard filed for insolvency in June 2020 after the auditor found no evidence of €1.9 billion of cash on the balance sheet leading the company to admit that the amount “likely” does not exist. Subsequently, some of Wirecard’s former management were arrested and the insolvency administrator started the liquidation of the company. Creditors of the company registered insolvency claims amounting to €12.433 billion against the group at the Munich District Court in November 2020.
All of Wirecard’s debt was unsecured and consisted of a €1.75 billion RCF, €500 million of notes due 2024 and a €900 million convertible bond. The €900 million convertible bond was issued to Softbank and later syndicated to other lenders by Credit Suisse.
The main holders of Wirecard’s RCF and bonds include investment funds Attestor and Cyrus Capital.
Shareholder Union Investment filed a lawsuit against Wirecard in August 2021 due to the company’s publication of incorrect information prior to the insolvency filing. Law firm TILP submitted compensation claims on behalf of 10,000 Wirecard shareholders, as reported. In May 2020, TILP sued Wirecard in the district court of Munich for damages on behalf of the shareholders. In June 2020, the law firm also sued EY, Wirecard’s management and the regulator BaFin on behalf of the shareholders.
The company’s insolvency administrator Michael Jaffé said in May 2022 that the Regional Court of Munich ruled Wirecard's annual financial statements as at Dec. 31, 2017, and 2018 invalid, upholding the complaint filed by the insolvency administrator in November 2020.
The company’s auditor, EY, is already under investigation by Munich criminal prosecutors and Germany’s audit watchdog over a potential violation of professional duties.
Wirecard was an investment grade issuer listed on the Frankfurt stock exchange and part of the DAX index from September 2018 to August 2020. The bonds started to drop after the Financial Times and short sellers highlighted accounting irregularities in 2019.
-Luca Rossi, Aurelia Seidlhofer
Bids for the debt were in the 13-14 region until the buyer increased its offer, sources added.
According to one source, the buyer, who wasn’t already involved in the German payment systems company’s RCF, may consider selling the debt piece to investment funds.
As reported, at the end of November a Munich court ruled that shareholder claims for damages as a result of misleading statements made by Wirecard cannot be added as insolvency claims ranking pari passu with other creditors. The court said these damages cannot be considered insolvency claims.
Sources told Reorg, the administrator has recovered more than €700 million as of December and there could be further recovery of funds from the guarantors of the debt.
Wirecard filed for insolvency in June 2020 after the auditor found no evidence of €1.9 billion of cash on the balance sheet leading the company to admit that the amount “likely” does not exist. Subsequently, some of Wirecard’s former management were arrested and the insolvency administrator started the liquidation of the company. Creditors of the company registered insolvency claims amounting to €12.433 billion against the group at the Munich District Court in November 2020.
All of Wirecard’s debt was unsecured and consisted of a €1.75 billion RCF, €500 million of notes due 2024 and a €900 million convertible bond. The €900 million convertible bond was issued to Softbank and later syndicated to other lenders by Credit Suisse.
The main holders of Wirecard’s RCF and bonds include investment funds Attestor and Cyrus Capital.
Shareholder Union Investment filed a lawsuit against Wirecard in August 2021 due to the company’s publication of incorrect information prior to the insolvency filing. Law firm TILP submitted compensation claims on behalf of 10,000 Wirecard shareholders, as reported. In May 2020, TILP sued Wirecard in the district court of Munich for damages on behalf of the shareholders. In June 2020, the law firm also sued EY, Wirecard’s management and the regulator BaFin on behalf of the shareholders.
The company’s insolvency administrator Michael Jaffé said in May 2022 that the Regional Court of Munich ruled Wirecard's annual financial statements as at Dec. 31, 2017, and 2018 invalid, upholding the complaint filed by the insolvency administrator in November 2020.
The company’s auditor, EY, is already under investigation by Munich criminal prosecutors and Germany’s audit watchdog over a potential violation of professional duties.
Wirecard was an investment grade issuer listed on the Frankfurt stock exchange and part of the DAX index from September 2018 to August 2020. The bonds started to drop after the Financial Times and short sellers highlighted accounting irregularities in 2019.
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