Between 2002 when Markus Braun took over Wirecard and 2020, when he was finally pushed out, Wirecard AG rose to become on of the most valued companies in Europe and borrowed close to €3Bn via bank facilities and bonds issued. Shareholders are thought to have put in close to €500m to.
Southey Capital believes that the current (2020 11) recovery prospects for the lenders, should they all end up ranking equally and based on the midlevel of our expectations will be close to 15% or €465m.
A higher amount could be raised by the liquidator, but they will have relatively high costs pursuing the numerous parties concerned and some costs in selling the viable business areas. Other large bankruptcies have taken ten years or more to make significant distributions, so taking a average time frame of 6 years to see payments, the current prices of 9-10% on Wirecards bonds represent a somewhat fair price.
Whilst the sale of business units has, as of 2020 11, started well. We believe the amounts raised will represent a significant portion of the recovery, further amounts will take time and likely the threats of not actual litigation. For example a settlement from auditors, insurance companies and eventually management.
The liquidator may even look at any distributions made to shareholders, for disgorgement, as the payment was a distribution of capital rather than profits, though that is likely to be contentious.
We are interested in buying the bonds and bank debts of Wirecard and would be happy to look at any reasonable offers that sellers make to us. Please feel free to contact us using the form below.