Softbank Set to Invest $1 billion into Wirecard

Softbank Group plans on investing $1.01 billion into Wirecard, a digital payments company based in Germany, by acquisition of convertible bonds. On Wednesday, according to a statement released by Wirecard, Softbank will take hold of a 5.6 percent stake in their shares.

Wirecard said five-year term convertible bonds shall be issued solely to Softbank. Precisely 6,923,076 shares at $145.74 per share will be sold to the Japanese multinational holding conglomerate. This, however, is still subject to the approval of shareholders on June 18.

This move is also Wirecard’s first line of self-defense against reports from a news publishing company saying staff at its Asian operations caused inflation to its disclosed revenue. Earlier this year, Wirecard said an external law firm, which conducted investigations regarding the issue, learned that local staff at its Asian office may have committed crimes, although it only brought minimal effect to the company’s financial position.

Both companies, as they have confirmed, had already signed a memorandum of understanding with regards to the strategic partnership, particularly in the digital solutions section.

Softbank will assist Wirecard in its expansion into Asian countries, especially Japan and South Korea. They will also provide collaboration opportunities to make use of digital payments and other services which Wirecard has available.

Wirecard Chief Executive Markus Braun said in a statement, “In SoftBank, we have found a partner that shares both our passion for new technologies and drive to spearhead the latest innovations, all on a global scale.”

"Through this potential partnership, we will expand our reach and products to the East Asian markets, thereby further strengthening our position in Asia," he added.

The stock price of Wirecard surged by 9.72% to 135.55 euros ($151.89) on Wednesday afternoon, moving significantly higher from its previous close at 123.50 euros ($138.37).

Softbank stocks have also inched marginally higher by 0.39% to 11,550 yen ($103.28) per share.


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