Greensill Capital files for bankruptcy in the UK

Düsseldorf, Frankfurt, London Financial group Greensill Capital also filed for bankruptcy in Britain on Monday. The company was “in serious financial trouble,” Greensill’s lawyers said, according to the “Financial Times” in court.

Last week, the supply chain financier had already filed for bankruptcy protection in Australia. The German banking supervisory authority, Bafin, had also stopped all deposits and withdrawals at the German subsidiary, Bremer Greensill Bank.

The bankruptcy should pave the way for the sale of parts of the business to the financial investor Apollo. The conversations continue. Greensill Holding is registered in Australia and Greensill Capital is based in London. Fintech has more than a thousand employees around the world.

The finance company was into supply chain financing – it advanced cash to its customers and paid its supplier invoices right away at a discount. Later, Greensill demanded the customer the full amount of the invoice. She packaged the relatively short-term demands of her clients in securities, which she in turn offered to investors.

The best jobs of the day

Find the best jobs now and
be notified by email.

The crisis began a week ago when insurance coverage for most of Greensill’s business expired. The Supreme Court of Sydney confirmed on Monday the cancellation of the insurance policy by the insurer Tokio Marine.

As a result, leading Swiss bank Credit Suisse froze four funds with an investment capital of $ 10 billion, which Greensill uses to finance ongoing businesses. In addition, the money house demanded, according to “FT”, the repayment of a loan of 140 million dollars. Greensill was unable to do this.

Numerous customers affected

Numerous clients would also be affected by bankruptcy, Greensill’s lawyers warned at the Sydney trial last week. The largest client was Sanjeev Gupta’s GFG Alliance materials group, which is now seeking new funding. According to information from financial circles, the volume should exceed four billion US dollars.

In an initial statement, the GFG Alliance rejected concerns about impending insolvency. Demand for the main aluminum and steel products is very good around the world, which will facilitate refinancing, a spokesperson said. The goal is to conclude the loans like other long-term industrial companies. There are several options for this, but there is no solution. With Greensill’s bankruptcy filing, the pressure to find a solution is mounting rapidly.

At Greensill, meanwhile, three other board members resigned from their post, the Bloomberg financial service reported. These included President Maurice Thompson and former Morgan Stanley bankers David Brierwood and Patrick Allin. This increases the number of board members who have resigned to seven, including the brother of the company founder, Lex Greensill.

According to company records, Thompson, Brierwood and Allin had resigned on February 3, but the relevant documents were not presented to Australian regulators until Friday.

Plus: The Role of the Head of the Risk Committee on Greensill Bank’s Board of Directors Raises Questions

Vince Fernandez

"Professional food trailblazer. Devoted communicator. Friendly writer. Avid problem solver. Tv aficionado. Lifelong social media fanatic."

Leave a Reply

Your email address will not be published. Required fields are marked *