Specialized finance firm Greensill Capital headed for a rapid unraveling after Credit Suisse Group AG suspended $ 10 billion in investment funds supporting SoftBank Group Corp. supported startup.
With a major source of funding frozen, Greensill has appointed Grant Thornton to guide it through a potential restructuring, and it could file for insolvency, the UK’s 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 business for about $ 100 million, according to people familiar with the talks. While a deal wouldn’t cover all of Greensill’s assets, the amount represents a slice of its peak value of $ 4 billion.
The British Greensill is the brainchild of the former financier of Citigroup Inc. and Morgan Stanley, Lex Greensill. Founded in 2011, Greensill specializes in an area known as supply chain finance, a form of short-term cash that allows businesses to extend the time they have to pay their bills.
Greensill packages those cash advances into bond-style securities that provide investors with higher returns than they could get from bank deposits. Credit Suisse’s funds were a major purchaser of those securities, giving Greensill the firepower to expand its business. Investors in the funds include pensions, corporate treasurers and wealthy families.