Wirecard Card Solutions Ltd. has announced plans to sell its UK operations more than two months after the disgraced German payments company filed for insolvency.
August 29, 2020 | AtoZ Markets – Looks like another chapter is opening up for Wirecard, the disgraced fintech out of Germany that filed for insolvency earlier this year after facing a huge accounting scandal and subsequently failing to make payments on $1.5 billion in loans coming due.
Wirecard unveils plans to sell UK operations to Railsbank
Wirecard Card Solutions Ltd. has announced plans to sell its U.K. operations. Under the terms of the agreement, the company’s card technology, clients, and assets would be sold to Railsbank, the London-based FinTech. Some employees will go to Railsbank as well. However, the firm did not disclose financial terms.
“Railsbank has proven production experience of running over 50 card programs in the United Kingdom, European Union, United States and Singapore and has all the supporting operational and license infrastructure,” Wirecard said in a statement on Friday (Aug. 28).
If approved by the court, the transfer of Wirecard Card Solutions’ customer accounts will take place between now and November. In the meantime, customers can continue to use their cards and access cash, as usual, Wirecard said.
“In planning the future of the company, one of our key priorities continues to be that our valued customers get the best possible outcome,” said Thomas Jennings, managing director at Wirecard Card Solutions, in a statement. “We believe that our solvent wind-down proposal, including the proposed sale of assets to Railsbank, will achieve that key priority.”
Jennings said the hope is that its program managers will support the proposal. In addition, he thanked customers for their support, as well as Mastercard and Visa for their help in making the transition seamless.
Nigel Verdon, CEO, and co-founder of Railsbank, said that they prioritize the needs of their customer and team. “The Railsbank team will conscientiously work on ensuring customers, program managers and team members have a seamless transfer to their new home,” he said in a statement.
Wirecard is facing investigations
Wirecard AG filed for insolvency in June in a Munich court. This was after an auditor’s disclosure reveals that $2.1 billion deposits were missing from two banks in the Philippines. The company is facing investigations by law enforcement in Munich, Singapore, the United Kingdom and the European Union.
Last week, Michael Jaffé, the insolvency administrator, said that they have reached an agreement to sell Wirecard’s Brazilian business to Sao Paulo-based PagSeguro Digital. This is one of the nation’s largest mobile payment eCommerce companies.
“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,” Jaffé said in a statement.
In addition, he noted that they could announce the sales of some of the company’s North American operations soon.
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