June 23, 2024

Greensill Capital files for bankruptcy in the UK

Greensill Capital files for bankruptcy in the UK

Dusseldorf, Frankfurt, London Heavily troubled Greensel Capital financial group filed for bankruptcy in Great Britain on Monday. Greensel’s lawyers said, according to the Financial Times, in court that the company was “in serious financial difficulty”.

Last week, the supply chain financier already sought bankruptcy protection in Australia. The German banking supervision authority Bafin has also stopped all deposits and withdrawals at the German branch of Bremer Greensill Bank.

Bankruptcy should clear the way for the sale of parts of the business to the financial investor Apollo. Conversations continue. Greensill Holding is registered in Australia and Greensill Capital is headquartered in London. Fintech has more than a thousand employees worldwide.

The finance company was involved in financing the supply chain: it paid cash to its customers and paid its suppliers’ bills on the spot with a discount. Greensill subsequently claimed the full amount of the bill from the customer. It garnered relatively short-term orders on its clients in securities, which in turn offered them to investors.

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The crisis began a week ago when insurance coverage for most of Greensel’s businesses expired. The Sydney High Court on Monday confirmed the insurance policy was canceled by insurance company Tokio Marine.

Then I had the main Swiss bank Swiss credit Four funds with a capital of $ 10 billion that Greensel used to finance day-to-day operations have been frozen. Dar Al Mal has also demanded, according to the “Financial Times”, to repay a loan of $ 140 million. Greensel couldn’t do that.

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Several clients were affected

Many clients will also be affected by bankruptcy, Greensel’s attorneys warned last week at the Sydney trial. The largest customer was Sanjeev Gupta’s GFG Alliance Materials Group, which is now looking for new funding. According to information from the financial departments, the volume should be more than four billion US dollars.

In a preliminary statement, the GFG Alliance dismissed concerns about impending bankruptcy. A spokesperson said that demand for major aluminum and steel products is very good worldwide, which will make refinancing easier. The goal is to take out loans like other industrial firms in the long run. There are many options for this, but there is no solution. With Greensel filing for bankruptcy, the pressure for a solution is mounting rapidly.

Meanwhile, three other members of the board of directors in Greensel have resigned, Bloomberg Financial Service reported. Among them were President Maurice Thompson and the first Morgan StanleyBankers David Brearwood and Patrick Allen. This increases the number of board members who have resigned to seven, including the company’s founder’s brother, Lex Greensel.

According to company records, Thompson, Brearwood and Allen resigned on February 3, but the related documents were not provided to the Australian regulators until Friday.

More: The role of the chair of the risk committee on the Greensel Board of Directors raises questions