Greensill Capital: Australian financial group allegedly faces bankruptcy

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Photo: FRANK RUMPENHORST / AP

Bremer Greensill Bank emerged from the former Nordfinanz Bank AG.

In 2014 this was taken over by Greensill Capital.

The institute has grown massively since 2017, with total assets increasing tenfold to 3.8 billion euros by the end of 2019.

But according to media reports, the Australian-British parent company Greensill Capital is threatened with severe economic difficulties.

The "Financial Times" reports, citing insiders, that Greensill Capital wants to file for bankruptcy in Australia.

The institute, founded in 2011 by Citigroup banker Lex Greensill, did not want to comment.

The holding company Greensill Capital Pty Limited is based in Australia, the operational business is bundled in the British Greensill Capital UK.

As a result of the events, the Bremen-based Greensill Bank comes into focus, which is attracting deposits from German private customers with comparatively high interest rates.

According to the Reuters news agency, the institute could not be reached for questions at first.

One thing is clear: Greensill Bank, whose liabilities to customers amounted to 3.3 billion euros according to the annual financial statements at the end of 2019, is closely interwoven with Greensill Capital.

The institute is a kind of funder and guarantor for the group.

The rating agency Scope wrote last October that Greensill Bank was completely dependent on Greensill Capital for doing business and hedging credit risks.

Credit Suisse and GAM cease trading in Greensill funds

What the impending bankruptcy of Greensill Capital means for Greensill Bank is uncertain.

However, investors could face troubled times, especially if they have parked more money there than the 100,000 euros protected by the statutory deposit insurance in Germany.

However, the bank is also a member of the deposit protection fund of private German banks through which every customer could claim a much higher compensation.

The last time it came to fruition was the collapse of the Maple Bank in Frankfurt in February 2016.

Meanwhile, important partners are cutting their business relationships with the London-based finance company.

The Swiss fund house GAM announced that it will liquidate the GAM Greensill Supply Chain Finance fund operated together with Greensill.

On Monday, the major Swiss bank Credit Suisse had temporarily suspended trading in funds with a total volume of ten billion dollars, and subscriptions and redemptions of units in the supply chain finance funds were suspended.

With the decisions, Greensill will again no longer have any sources of finance.

Greensill Capital is meanwhile heading for an emergency sale.

The company is in exclusive negotiations with a "global financial institution" with the aim of reaching a deal over the course of the weeks, as Greensill announced.

The transaction is expected to include large parts of the business and assets under management.

A significant number of jobs are likely to be retained.

The Wall Street Journal reported on Monday that the financial investor Apollo Global Management was in negotiations with Greensill to take over its operations.

Greensill Capital specializes in supply chain finance.

The company packages the receivables in securities and places them with investors.

These supply chain finance funds finance supplier claims on companies.

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apr / Reuters