Home » Greensill Capital faces possible insolvency after Credit Suisse suspends investment funds: WSJ
Greensill Capital faces possible insolvency after Credit Suisse suspends investment funds: WSJ
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Specialty finance firm Greensill Capital headed toward a rapid unraveling after Credit Suisse Group AG suspended $10 billion of investment funds that fueled the SoftBank Group Corp. -backed startup.
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With a key source of financing frozen, Greensill has appointed Grant Thornton to guide it through a possible restructuring, and it could file for insolvency, the U.K. equivalent of bankruptcy, within days, according to people familiar with the company.
Greensill is simultaneously in talks with private-equity giant Apollo Global Management Inc. to sell its operating business for around $100 million, according to people familiar with the talks. Though a deal wouldn’t be for all of Greensill’s assets, the amount represents a sliver of its peak valuation of $4 billion.
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U.K.-based Greensill is the brainchild of former Citigroup Inc. and Morgan Stanley financier Lex Greensill. 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 return than they could get from bank deposits. Credit Suisse’s funds were a major buyer of those securities, giving Greensill firepower to expand its business. Investors in the funds include pensions, corporate treasurers and wealthy families.
Greensill’s problems came to a head Monday after Credit Suisse said it would stop investors from buying or selling four private investment funds that rely exclusively on securities created by Greensill.
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