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Bloomberg
Germany’s state-owned development bank KfW is facing potential losses of 100 million euros ($112 million) after payment company Wirecard AG filed for insolvency.
KfW’s subsidiary Ipex Bank granted the scandal-hit company a 100 million-euro credit line in September 2018. The financing was extended last year and has been fully drawn down, a spokesman for Ipex told Bloomber. There are no hedges to protect the lender from any losses, he added.
Other banks are on the hook for about 1.6 billion euros in loans. The group of more than a dozen lenders led by ABN Amro Bank NV, Commerzbank AG and ING Groep NV were in negotiations with Wirecard aimed at keeping it afloat and were surprised by the insolvency filing, Bloomberg has
reported.
A spokesman for KfW said in a separate phone call that the bank is in touch with the other lenders.
The 100 million-euro loan is now with Ipex’s restructuring department, he added. Representatives for Wirecard couldn’t be reached outside regular business hours.
Wirecard was once lauded as one of Germany’s most successful up-and-coming businesses. The company’s unraveling quickened earlier this week when it said that 1.9 billion euros previously reported as cash on its balance sheet probably doesn’t exist.