Wirecard: difficulties pile up - stock crumbles
(CercleFinance.com) - On Friday Wirecard, the German specialist in electronic payments, announced the suspension, with immediate effect, of Jan Marsalek, its deputy CEO and above all its chief compliance officer.
The Munich-based group says it has replaced him with James Freis, who will now be assigned a new department covering integrity, legal compliance and governance issues.
This decision comes the day after the announcement that the group's financial statements for the 2019 financial year had been postponed following the appearance of elements deemed to be misleading.
Ernst & Young, its auditor, considered that it did not have sufficient documents to justify the existence of cash balances appearing in fiduciary accounts representing some 1.9 billion euros, i.e. a quarter of the group's consolidated balance sheet.
The consequences of the failure to certify the 2019 accounts before 19 June are devastating, as the group could become insolvent, in the event of an early repayment request of the 2 billion euro syndicated loan, Invest Securities analysts warn.
What is certain is that there is no visibility at all in the near term and that the group's medium- and long-term prospects are being called into question, with a company that could review its strategy and part ways with its CEO, Mr. Braun, the broker adds.
After collapsing over 62% yesterday, as a result of the company's woes, the Wirecard share was down a further 45% in early trading on Friday.
Due to the suspicions of persistent financial malpractice that weighed on the group for more than a year now, the share price has plummeted by 80% over the past 12 months.
For Oddo BHF analysts, a worst-case scenario cannot be ruled out today.
Analysts warn that Wirecard is therefore entering a zone of major risk that could tesult in debt restructuring (...), the sale of assets or even defaulting on payments, i.e. an extreme scenario.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The Munich-based group says it has replaced him with James Freis, who will now be assigned a new department covering integrity, legal compliance and governance issues.
This decision comes the day after the announcement that the group's financial statements for the 2019 financial year had been postponed following the appearance of elements deemed to be misleading.
Ernst & Young, its auditor, considered that it did not have sufficient documents to justify the existence of cash balances appearing in fiduciary accounts representing some 1.9 billion euros, i.e. a quarter of the group's consolidated balance sheet.
The consequences of the failure to certify the 2019 accounts before 19 June are devastating, as the group could become insolvent, in the event of an early repayment request of the 2 billion euro syndicated loan, Invest Securities analysts warn.
What is certain is that there is no visibility at all in the near term and that the group's medium- and long-term prospects are being called into question, with a company that could review its strategy and part ways with its CEO, Mr. Braun, the broker adds.
After collapsing over 62% yesterday, as a result of the company's woes, the Wirecard share was down a further 45% in early trading on Friday.
Due to the suspicions of persistent financial malpractice that weighed on the group for more than a year now, the share price has plummeted by 80% over the past 12 months.
For Oddo BHF analysts, a worst-case scenario cannot be ruled out today.
Analysts warn that Wirecard is therefore entering a zone of major risk that could tesult in debt restructuring (...), the sale of assets or even defaulting on payments, i.e. an extreme scenario.
Copyright (c) 2020 CercleFinance.com. All rights reserved.