Agricultural Bank of China contributes EUR 55 million to an EUR 1.75 billion syndicated revolving credit facility to Wirecard AG for financial distress purposes (Linked to Record ID#101154)

Project narrative

On June 15, 2018, syndication was launched on a loan in which 16 lenders — including the Agricultural Bank of China (ABC) — provided an EUR 1.75 billion revolving credit facility (RCF) to Wirecard AG for financial distress resulting from an accounting scandal. Bank of China's contribution was EUR 55 million. Loan terms included a maturity of six years, no securitization, and a guarantee by Wirecard. German prosecutors began investigating Wirecard in 2018, revealing that the company had violated accounting rules for years, resulting in a massive scandal, which the loan was attempting to help resolve. As of September 30, 2019, on the company's last published financial report, the drawn amount on this facility was undisclosed, and of the EUR 1.75 billion originally due in June 2023, EUR 1.55 billion was extended until June 2024. Total commitments of EUR 1.75 billion may be extended until June 2025 <>. In June 2020, concerns over a missing cash amount of EUR 1.9 billion on Wirecard's financial statements reduced Wirecard's market value by around 85%, prompting the resignation of the CEO. At the time, Bloomberg estimated that around 90% of this facility had been drawn at this point. Bank of China discussed ending their part of the facility, planning to consult an external legal team to look into minimizing losses. Most of the other banks in the syndicate were planning to extend the repayment obligation in order to better assess the potential impact of a default on their balance sheets. However, a prolonged extension could be seen as delaying insolvency, which is illegal under German law. Wirecard was working with Houlihan Lokey — an American investment bank — on a financing strategy, while also considering how to keep the business operating with a broad restructuring. On August 25, 2020, The Local Court of Munich opened insolvency proceedings over the assets of an EUR 500 million bond. According to Bloomberg, the syndicate's lead arrangers were Commerzbank, ABN AMRO, ING and LBBW, each contributing EUR 200 million. Additional lenders included Barclays, Credit Agricole, DZ Bank, and Lloyds at EUR 120 million each; Bank of China (captured in Record ID#101154), Citi, Deutsche Bank, and MUFG at EUR 80 million each; Raiffeisen International at EUR 70 million; Raiffeisen Niederösterreich at EUR 60 million; Agricultural Bank of China (captured in this Record ID#101156) at EUR 55 million; and Raiffeisen Oberösterreich at EUR 45 million.