Wirecard sees profit potential of Softbank alliance at up to 273 mln euros

Credit: REUTERS/Wolfgang Rattay

Wirecard sees the total five-year profit potential from its alliance with Japan's Softbank Group Corp at between 209 million euros and 273 million euros ($235-$307 million), the German payments company said on Friday.

Adds breakdown of profits potential

FRANKFURT, May 10 (Reuters) - Wirecard WDIG.DE sees the total five-year profit potential from its alliance with Japan's Softbank Group Corp 9984.T at between 209 million euros and 273 million euros ($235-$307 million), the German payments company said on Friday.

Wirecard struck the partnership last month with Softbank, to which it is issuing 900 million euros in convertible bonds, and gave a first estimate of its profit potential in an invitation to its annual general meeting on June 18.

The present value of the estimated profit gains, after applying an 8.5 percent discount rate to reflect Wirecard's cost of capital, was betweeen 152 million and 199 million euros, the company said.

Munich-based Wirecard, Germany's largest fintech company, sees a present-value profit boost of up to 101 million euros over the five-year period in partnering with companies backed by Softbank, the world's biggest tech investor.

Up to 51 million euros could come from entering the Japanese and Korean markets with Softbank's support, with up to 47 million euros more to come from jointly developing new products and services, it said.

Wirecard struck the partnership with Softbank as it seeks to shake off allegations of fraud and false accounting in a string of reports in the Financial Times that knocked up to $10 billion off its market value in the early months of this year.

The company has denied wrongdoing but promised to tighten up internal compliance after winning a 'clean' opinion on its annual results from auditor EY.

As part of the Softbank alliance, which will go to a vote at the annual general meeting, the Japanese investor will take one of six seats on the Wirecard board.

($1 = 0.8898 euros)

(Reporting by Douglas Busvine Editing by Thomas Seythal/Keith Weir)

((douglas.busvine@tr.com; +49 69 7565 1271; Reuters Messaging: douglas.busvine.thomsonreuters.com@reuters.net))

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