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Wirecard files for insolvency with $4bn owed to creditors

Wirecard files for insolvency with $4bn owed to creditors

Mubasher: Wirecard will file for insolvency proceedings after revealing that EUR 1.9 billion ($2.1 billion) in cash was missing from its accounts, owing its creditors nearly EUR 3.5 billion ($3.9 billion), Reuters reported on Thursday.

The German payment processer borrowed EUR 1.75 billion from 15 banks and EUR 500 million from bond investors, a source familiar with the matter told the international news agency.

We may recoup a few euros in a couple of years, but will write off the loan now,” a source at one lender said.

The management decided to open insolvency proceedings with the competent district court of Munich “due to impending insolvency and over-indebtedness,” the company said in a statement.

Wirecare’s collapse comes after its former CEO Markus Braun was released from custody after being arrested on suspicion of falsifying the German payments firm’s accounts.

Braun was freed one day after turning himself in on Monday after on a bail of EUR 5 million ($5.65 million).

Last week, the auditor Ernst & Young (EY) refused to sign off Wirecard’s annual financial results, saying that EUR 1.9 billion of cash was missing, nearly a quarter of its consolidated balance sheet.