Credit Suisse to wind down Greensill-linked funds as GFG ‘ceases repayments’
Banker Credit Suisse today said that it would wind down supply-chain finance funds worth around $10bn linked to embattled Greensill Capital.
In a statement this morning the Swiss lender said it would start repaying investors around 80 per cent of the $3.7bn it has available.
The decision came as Sanjeev Gupta’s GFG Alliance decided to stop making repayments to Greensill.
On Monday the bank had suspended redemptions and subscriptions from the affected funds over concerns around being able to accurately value them.
Today it said that the decision to terminate the funds was triggered by reduced availability of insurance coverage for new investments and the substantial challenges to source suitable investment.
“The fund boards have now decided to terminate the funds. Credit Suisse Asset Management’s priority is to ensure a balance between a timely liquidation of the funds and maximizing value for the investors”, it said in a statement.
Since Credit Suisse took the decision to suspend the funds, Greensill, which employs former PM David Cameron as an adviser, has been hunting alternative funding to avoid collapse.
It is reportedly preparing to file for bankruptcy and is also in talks to sell large parts of its business to private equity firm Apollo Global Management.
The firm, which specialises in supply-chain finance where businesses borrow money to pay bills, is also facing a criminal complaint from the German regulator Bafin.
Overnight the FT first reported that billionaire Sanjeev Gupta’s GFG Alliance had halted payments to Greensill.
The business empire, which includes Liberty Steel, has long been reliant on Greensill, to the suspicion of regulators.
But according to the FT Gupta has told senior colleagues that he will no longer repay any money owned to Greensill.
There are fears that thousands of jobs at the conglomerate could be put at risk by the collapse of Greensill.
A spokesperson for GFG Alliance pushed back, saying: “GFG Alliance has adequate current funds and its plans to bring in fresh capital through refinancing are progressing well.
“Our global efficiency drive means that our core businesses are operationally strong and improving. We are benefiting from a recovery in steel and aluminium markets which means that most of our businesses are running at near full capacity to meet high demand and are generating positive cash flows.”