According to the official announcement, the High Court was told that PCSIL is solvent, but that the winding up petition was being brought on the basis that its business model is loss-making and not commercially viable.
The court also heard that the company, which holds EUR 516 million of segregated funds for customers with 2.4 million prepaid cards in issue, expects to be in a position to pay all of what it owes its creditors.
In a statement following the development, the Central Bank said the joint provisional liquidators will continue to assess the solvency on an ongoing basis, throughout the liquidation process.
The announcement also mentioned that PCSIL and Interpath have committed that all current card holders can, subject to new limits, continue to load funds to their card until 17 July 2024 and can continue to spend on their cards up to 17 January 2025 subject to certain changes and their terms and conditions.
EML Payments said the action would conclude a period of significant earnings losses, cash burn and management distraction from operating PCSIL. Going forward, EML’s remaining exposure to PCSIL is limited to USD 13 million of cash outflow, for the repayment of intercompany balances.
Moreover, there will also be a one-off non-cash impairment charge of around USD 16.5 million arising from the liquidation representing the removal of net assets of the PCSIL business and any associated intangibles from EML’s financial statements.
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