Aussie paytech EML Payments to wind down Irish subsidiary PCSIL
EML Payments is winding down its Irish subsidiary, PFS Card Services Ireland Ltd. (PCSIL), with the company stating the business is “no longer commercially viable and sustainable”.
EML Payments’ PCSIL business is headed for liquidation
Although presently solvent, the Australian paytech claims PCSIL, the pre-paid card provider it acquired in 2019 for its digital banking and multi-currency offerings, would burn a $13.1 million (AUD 20 million) hole in its pocket during FY24 ” if the business continued to operate in its current form”.
The Wicklow-based division was deconsolidated from EML Group and ceased operations on 16 and 17 of January, respectively.
Based on the recommendations of the PCSIL board, particularly those pertaining to “sustained earnings losses”, “unsustainable capital investment requirements”, its “deteriorating trading performance” and “limited commercial attractiveness”, Interpath Advisory was instated as provisional liquidator for PCSIL on 17 January following an application with the High Court of Ireland.
With Kieran Wallace and Andrew O’Leary of Interpath now leading the liquidation, EML estimates its remaining cash exposure to the subsidiary is limited to the repayment of $13.1 million (AUD 20 million) as a result of “intercompany balances owed by EML Group entities to PCSIL, the bulk of which arose in 2022” – a transaction it says it hopes to complete in the next nine to 12 months.
It says there will also be a “one-off non-cash impairment charge” of around $16.5 million (AUD 25 million) arising from the liquidation representing “the removal of net assets of the PCSIL business and any associated intangibles from EML’s financial statements”.
Speaking on the liquidation, Luke Bortoli, chairman of EML, describes PCSIL as “not commercially viable for future investment”, and that the decision to shut down will “allow EML to redirect management resource and capital to our core businesses”.
Last year, EML Payments embarked on a strategic review that could see all or part of the business sold as the company looks to “transition away” from its previous long-term strategy. The “change in operational priorities” at the firm has also seen CEO Emma Shand resign from her role after just 10 months.
