Wirecard eyes share buybacks, sales leads from Softbank alliance

Reuters Business 08 May 2019 03:07

FRANKFURT (Reuters) - German payments firm Wirecard is considering buying back shares following its partnership with Japan’s Softbank Group which it said on Wednesday had already created leads for potential cooperation in digital payments.

FILE PHOTO: Markus Braun, CEO (R) and Alexander von Knoop, CFO of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions attend the company's annual news conference in Aschheim near Munich, Germany April 25, 2019. REUTERS/Michael Dalder/File Photo

Wirecard will pay out to shareholders “a substantial portion” of the proceeds of a 900 million euro ($1 billion) convertible bond issue that Softbank will buy as part of the alliance struck last month, CEO Markus Braun said.

“We have already started very quickly to make this partnership happen,” Braun told analysts on a conference call after Wirecard reported a 41 percent increase in first-quarter core profits, helping to lift its shares price.

Braun made the bullish statements as he seeks to shake off allegations of fraud and false accounting made in a series of Financial Times articles that shook investors and wiped up to $10 billion off Wirecard’s market value in January and February.

Wirecard won a ‘clean’ opinion from auditor EY for its annual results, but said it would tighten up on compliance after finding shortcomings in the handling of software licenses issued to its partners.

He declined to elaborate but said Wirecard would share an analysis of the alliance’s potential in invites for its June 18 annual general meeting that go out this Friday. Shareholders are being asked to vote on the Softbank deal.

Softbank, the world’s biggest venture fund which runs the $100 billion Vision Fund, counts ride-hailing players Uber, Grab and Didi, along with shared office space provider WeWork, among its properties.

Wirecard lifted its outlook for earnings before interest, taxation, depreciation and amortization (EBITDA) to between 760 million euros and 810 million euros ($851-$907 million) this year. The mid-point implies that the acceleration in the early months of this year will persist.

Its shares rose 4 percent in Frankfurt trading following the results with some analysts also hailing the potential from the Softbank alliance.

Wirecard has long been a target of ‘short’ sellers who seek to expose accounting irregularities and profit from ensuing share price declines - triggering probes by German prosecutors who suspect illegal market manipulation.

“The partnership with Softbank is a game changer,” said Robin Brass at private bank Hauck & Aufhaeuser, estimating it could boost Wirecard’s EBITDA by 100 million euros.

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WirecardCEO Markus BraunSoftbankFRANKFURTMunich
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