SoftBank Group founder, chairman and CEO Masayoshi Son announces their group’s earnings results on May 9, 2019 in Tokyo.
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Greensill Capital is preparing to file for insolvency in the UK, according to a Report from The Financial Times on Wednesday, citing sources familiar with the matter.
The insolvency application will reportedly enable the venture capital company Apollo Global Management to acquire parts of the business outside the administration.
Greensill, who employs former British Prime Minister David Cameron as an adviser, did not immediately respond to a CNBC request for comment. But a spokesman told The Guardian the newspaper that there has been a regular audit of the bank since the autumn.
“This statutory audit report has specifically not revealed any dissatisfaction with the bank,” they said. “We have a constructive ongoing dialogue with all regulators in all jurisdictions in which we operate.”
Greensill provides working capital financing to companies and individuals worldwide. It claims on its website that it “unlocks funding so that the world can put it to work” and by 2020 it issued over $ 143 billion in funding to over 10 million customers.
The company’s most important financial product is known as supply chain finance, which enables companies to borrow money to pay their bills. But critics say it could be used to hide rising debt.
Greensill sought a bailout agreement with new and existing supporters after Credit Suisse and GAM Holdings announced that they were shutting down funds linked to the company because they were worried about its real value.
Credit Suisse suspended $ 10 billion in funds connected to Greensill on Monday and GAM Holdings said on Tuesday that it was closes its $ 842 million GAM Greensill Supply Chain Financing Fund. The move cut off Greensill’s access to capital.
A spokesman for Greensill reportedly told The Guardian that it had entered “a period of exclusivity with a leading global financial institution” and that it plans to complete a transaction this week.
“The transaction is expected to cover large parts of Greensill’s operations and its assets under management,” they said. “While the structure of the new business is still being established, we expect the transaction to ensure that the majority of Greensill customers will continue to be financed in the way they currently are while retaining a large number of jobs.”
Greensill received support from SoftBank’s Vision Fund with $ 1.5 billion in 2019. SoftBank’s share is said to risk being completely wiped out.
Greensill is based in London but the parent company is headquartered in the Australian city of Bundaberg, which is home to founder Lex Greensill, who previously worked on supply chain financing at Morgan Stanley and Citibank. He and his brother Peter have reportedly earned billions from the venture and they are fighting to ensure it survives this crisis by seeking relief from insolvency laws in Australia.
Greensill’s subsidiary in Germany has been placed under the supervision of the financial watchdog BaFin, according to a separate report from FT on Tuesday. BaFin did not immediately respond to a CNBC request for comment.