(2 March 2021 – Global) Greensill Capital is rapidly unravelling after Credit Suisse suspended $10 billion in investment funds citing “considerable uncertainties”.
The Wall Street Journal has reported it is Greensill’s exposure to UK based Sanjeev Gupta that has concerned the Swiss bank.
Greensill, a supply chain financing company, is in talks with US private equity firm Apollo Global Management to sell “large parts of Greensill’s business and its assets under management” for around $100 million in a deal that could be fast-tracked and finalised this week.
Founded in 2011, Greensill specializes in an area known as supply-chain finance, a form of short-term cash advance that lets companies stretch out the time they have to pay their bills.
Greensill packages those cash advances into bondlike securities that give investors a higher yield than they could get from bank deposits. Credit Suisse's funds were a major buyer of those securities from Greensill, giving the company more firepower to do deals with more companies. Investors in the funds include pensions, corporate treasurers and wealthy families.
German banking regulator BaFin last year began probing ties between Mr. Gupta's businesses and Greensill's German banking unit Greensill Bank. A report from Scope Ratings in 2019 said about two-thirds of the bank's loan book was linked to Mr. Gupta's businesses.