Finance

Wirecard administrator agrees sale of chunk of Asia operations

Wirecard’s administrator has reached an agreement to sell a large chunk of the defunct business’ operations in Asia, in a deal that ushers in the final stage of the dismantling of the collapsed German payments group. 

A payments firm backed by Finch Capital, an Amsterdam-based venture capital fund, is set to buy Wirecard’s legal entities in the Philippines, Malaysia, Hong Kong and Thailand as well as the company’s regional data warehouse in Singapore, its Asia-Pacific headquarters.

An Indonesian group’s technology holding company has bought Wirecard’s unit in the country, which includes 360 staff in Indonesia and Malaysia. 

“Following a challenging bidding process we succeeded in selling the companies for the best possible price and securing substantial flows to the debtors’ assets in Germany,” said Michael Jaffé, Wirecard’s Munich-based administrator. Business units “worth retaining” will continue as going concerns, he added.

Wirecard collapsed into insolvency last June in one of the country’s largest accounting frauds. Since then Jaffé has divested the company’s operations in the Americas, the UK and continental Europe. Last October, US-based Syncapay, a holding company that specialises in payment solutions, acquired Wirecard North America, while Spanish lender Santander one month later paid about €100m for Wirecard’s core business in Europe. The German company’s banking unit will be wound down.

The transactions will further shrink what is left of Wirecard in Asia-Pacific, a region where it expanded aggressively in its heyday. One of the biggest remaining assets is Wirecard’s payments business in India.

The size of Finch Capital’s deal — which includes Wirecard’s clients, licences and more than 120 staff — fell below the approximately €200m the German group paid Citigroup to acquire its merchant portfolio. Radboud Vlaar, managing partner at Finch Capital, declined to elaborate. 

In 2017, Wirecard acquired 20,000 merchant clients from the US lender, spread over 11 Asia-Pacific countries, in an ambitious deal that was intended to make the company a household name across the region. Citigroup has said it exited the business globally.

Clients fled Wirecard after it admitted last year that €1.9bn supposedly held in Philippine bank accounts were missing. 

The Monetary Authority of Singapore, the country’s central bank, in September ordered Wirecard to cease payment services, after the city-state launched a criminal probe into the group as well as affiliated companies and agents.

But Vlaar said there are still many blue-chip clients left, including well-known international names such as European-headquartered companies operating in Asia.

The acquisition will help Finch Capital’s Nomu Pay, which last month said it would acquire Wirecard’s Turkish subsidiary, build an ecommerce and payments company in Asia.

Vlaar added: “We always look to what extent does an acquisition help us to be faster, versus an organic route.”

Finch Capital’s deal is set to close next month subject to regulatory approval, except for the Philippines, where it could take up to three months for the central bank to give the go-ahead.

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