German state bank faces $112 million of losses from Wirecard
State-owned KfW faces potential losses of upto $112 million dollar due to Wirecard insolvency.Updated: Jun 27, 2020 13:47 IST
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 Thursday.
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 Bloomberg in an email. 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, people familiar with the matter have said. A 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.
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.