(Bloomberg) — Wirecard’s lenders are considering hiring outside help as they seek to navigate the risk of a potentially massive default, a person familiar with the matter said.At least 15 commercial banks who have lent to Wirecard, led by Commerzbank AG, ABN Amro, LBBW and ING, are in hectic negotiations about the steps to take after the German payments company said yesterday it’s unable to release its annual report because it can’t locate 1.9 billion euros in cash ($2.1 billion), the person said. An announcement of the consortium’s next steps could happen soon, the person said asking not to be identified discussing private information.Wirecard AG has an outstanding revolving credit facility of 1.75 billion euros, according to data compiled by Bloomberg. The German payments company has warned that loans of as much as 2 billion euros could be terminated if its audited annual report isn’t published on Friday.Most of the banks are leaning toward an extension of the repayment obligation to give them more time to find out what’s going on and avoid a direct hit to their balance sheet, the person said. But that extension could be complicated by the fact that a prolongation could be seen as delaying an insolvency, which is illegal under German law, another person said.Wirecard didn’t respond to a request for comment.Read more: Wirecard’s $2.1 Billion Hole Deepens After Forgery Claim Deutsche Bank Chief Risk Officer Stuart Lewis declined to comment on Wirecard when asked about the exposure on a previously scheduled analyst call on Thursday. However, he said the bank typically hedges its exposure to companies with a low investment-grade credit rating and encouraged analysts to “draw your own conclusions.” Wirecard has a rating that’s one notch away from sub-investment grade.Lending RisksWirecard’s 1.75 billion-euro revolving facility is due June 2024. Banks in the facility include Agricultural Bank of China Ltd., Bank of China Ltd., Commerzbank AG, Deutsche Bank AG, DZ Bank AG, and Landesbank Baden-Wuerttemberg.The 1.75 billion revolver has about 800 million euros outstanding, according to Bloomberg data. The company had repaid part of the facility from a 500 million euros debt sale last year.Banks typically take and hold their revolving credit facilities’ commitments for high-grade companies that means most of Wirecard’s lenders may not have offloaded their lending risks in the company.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
