Wirecard (WDI.DE) has hired US investment bank Houlihan Lokey to come up with a new financing strategy as the troubled German payments firm looks to assuage investors, Reuters reported, after Moody’s slashed its rating to junk.
The downgrade follows from last week’s news that CEO Markus Braun is stepping down, after it was revealed that the company cannot account for €1.9bn (£1.7bn, $2.1bn) in cash missing from its accounts.
Moody’s said “the auditor of Wirecard did not find sufficient evidence for cash balances amounting to €1.9bn and there are indications of fraud related to the balance confirmations.”
It added that “the downgrade of Wirecard's ratings and review for further downgrade reflect the accounting irregularities and related implications on the company's liquidity and financial profile following its failure to publish the already postponed audited consolidated accounts for 2019.”
The company’s auditors refused to sign off on its 2019 earnings report, which could trigger refinancing needs, Reuters reported analysts as saying.
Analysts also said banks could move to call in some €2bn in loans granted to the firm.
News of the missing cash prompted Wirecard’s stock price to plunge by over 60% on the DAX on Thursday (18 June), and to collapse again on 19 June by almost half, chopping around €10bn off its value in less than two days.
The stock recovered slightly on news of Braun’s resignation.
Braun is the second head to roll at the troubled German company this week: on Thursday chief operating officer Jan Marsalek was temporarily suspended.