Australian branch of Greensill enters administration
The Australian arm of controversial supply chain financier Greensill Capital has been placed under administration after it was warned overnight that it was in “serious financial distress” and unable to repay a $ 140 million loan to Credit Suisse .
Grant Thornton was appointed administrator of Greensill’s Australian operations on Tuesday morning. This follows Grant Thornton’s appointment as head of the company in London overnight.
Chris Laverty, Trevor O’Sullivan and Will Stagg of Grant Thornton have been appointed Co-Directors of Greensill UK Operations (GCUK). Meanwhile, Matt Byrnes, Phil Campbell-Wilson and Michael McCann, also of Grant Thornton, have been appointed volunteer directors in Australia.
It comes after Greensill was hit by “flaws” in the GFG alliance of its main client Sanjeev Gupta.
In a statement, the directors said it was possible that Greensill – an empire founded by Bundaberg farmer turned global financier Lex Greensill, could be dismantled.
“The co-directors are in ongoing discussion with an interested party regarding the purchase of certain assets of Greensill Capital. As these discussions continue, it would be inappropriate to comment further at this time,” said the directors.
Mr Byrnes said: “We are working closely with UK administrators on the next steps in the administrative process”.
“We are not in a position to comment on the position of an individual client at this point. GCUK, as a provider of financing for the Greensill Group through its working capital products for supply chain finance, is insolvent and is now administered. UK administrators will write to creditors with an update shortly. ”
The directors of Greensill Capital in Australia will call the initial meeting of creditors within eight business days. A spokesperson for Greensill in Australia directed all inquiries to Grant Thornton.
Overnight in London, the directors of Greensill Capital, Grant Thornton, said discussions were continuing with “an interested party”, understood to be the US group Apollo Global Management.
Greensill’s main insurer cut a $ 4.6 billion policy last week amid uneasy about his exposure, prompting Credit Suisse to liquidate $ 10 billion of invested funds in loans arranged by the financier.
“Chris Laverty, Trevor O’Sullivan and Will Stagg of Grant Thornton UK LLP have been appointed co-directors of Greensill Capital (UK) Limited and Greensill Capital Management Company Limited,” Grant Thornton said in a statement.
“The co-directors are in ongoing discussions with an interested party regarding the purchase of certain assets of Greensill Capital.
“As these discussions continue, it would be inappropriate to comment further at this time.”
The move is tantamount to filling out insolvency protection in the United States, days after regulators took over its banking unit and Credit Suisse Group AG froze investment funds essential to the startup’s operations.
The company, founded by Lex Greensill of Queensland, specializes in short-term supply chain finance for businesses, but itself faces funding challenges and growing questions about accounting practices. opaque and complex.
The administration comes after European regulators increased pressure on Greensill Capital and British businessman Sanjeev Gupta’s GFG Alliance, asking European banks for details of their exposure to the two companies.
Mr. Gupta’s metals and mining empire is considered most at risk from the loss of financing facilities associated with financial services firms from Lex Greensill, the Bundaberg-born financier having financed GFG’s acquisition of a range of global assets, including the financing of the € 740 million ($ 1.14 bn) acquisition of the ailing European steel plants of ArcelorMittal by Liberty Delta from Mr. Gupta in 2019.
Greensill also provided ongoing funding through supply chain finance services to Mr. Gupta’s Liberty Primary Metals operations in Australia. News of increased control over its international borrowing comes as the Australian Workers’ Union has held emergency talks with Australian management of GFG, seeking assurances on the future of industrial facilities, including the Whyalla steel plant. in South Australia.
The administration ends a month of crisis for Greensill, whose collapse risks more than 50,000 jobs – including more than 7,000 in Australia – across the group and its customers.
Greensill’s lawyers appeared in a UK court on Monday, saying in court documents he had “fallen into serious financial difficulty” and could no longer pay his debts, according to reports.
Originally published as Australian branch of Greensill enters administration