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Australian dream:
Lex Greensill has risen from farmer's son to billionaire - but now a collapse of his financial group threatens tens of thousands of livelihoods
Photo: Screenshot Video / SoftBank Vision Fund
Insolvency applications in Australia and Great Britain, the bank in Bremen shut down by the supervisory authority - for
Lex Greensill
(44), life's work is acutely at stake.
"From humble beginnings to revolutionary thinking," is how his financial group Greensill, founded in 2011, tells its own story.
The Australian - previously a billionaire - was an investment banker for Morgan Stanley and Citigroup, but above all he presents himself as the offspring of a sugar cane and melon farm in the northern Australian province of Queensland, who was unable to study for lack of money.
That's why, so the legend goes, Greensill turned to supply chain finance: so that farmers and other suppliers don't have to wait for their money until the end customer has paid.
"Fair Finance" is the name of the PR-heavy.
Greensill Capital buys invoices for a fee, collects the receivables later and thus finances the advance payment.
The business model is not new and also not necessarily problematic, although the items that are not declared as liabilities in the balance sheet can also conceal the overindebtedness of companies.
Greensill has perfected the construction of complex structures.
The first warning sign came in 2015 with the bankruptcy of the Spanish green electricity company Abengoa, which, with the help of Greensill, had built up financial circuits off the balance sheet.
Sanjeev Gupta
Icon: enlargePhoto: Russell Cheyne / REUTERS
Today the biggest worries are Greensill's major customer
Sanjeev Gupta
(49).
Its beginnings were not quite so modest, after all, the grandfather was already an industrial tycoon in India, from which the family holding company GFG emerged.
But Gupta, with his own group Liberty House, made it to the savior of the steel industry of the former colonial power Great Britain - and then garnished with a bold vision of leading the coal and steel industry into a climate-neutral, green future.
In February the deal to bring in the heart of German heavy industry with Thyssenkrupp's steel division broke.
Around the same time, the Bafin banking supervisory authority complained about a cluster risk with Gupta at Greensill Bank - the Bremer Nordfinanz Bank, which Greensill took over in 2014.
In 2018, connections with Greensill and Gupta had already plunged the Swiss fund company GAM into a scandal.
But the Bremen Gupta business continued to grow, Greensill is now said to have several billion in the fire at Gupta.
And it is precisely this exposure that is being viewed critically in the current rescue talks.
Masayoshi Son
Icon: enlarge Photo: Issei Kato / REUTERS
Greensill grew big, like so many companies around the world, thanks to a capital injection from the financial acrobats of the Japanese Softbank group.
When the empire of
Masayoshi Son
(63) put 800 million dollars in Greensill Capital in May 2019, that drove the company value to 3.5 billion dollars - just as the GAM scandal was raging in Switzerland.
Softbank also participated in several of Greensill's financings and used the services to prop up some of the many highly indebted companies in the Softbank portfolio.
However, the Japanese already wrote off their own Greensill stake of 1.5 billion dollars at the end of 2020, and it should now drop to zero.
Thomas Gottstein
Icon: enlarge Photo: ARND WIEGMANN / REUTERS
Until recently, most of the money was gushing for Greensill from Zurich - until the major Swiss bank Credit Suisse pulled the plug on Monday.
A whopping ten billion dollars was put into the fund jointly launched by Greensill and Credit Suisse, which has now been frozen.
On top of that, there are other relationships such as a $ 160 million loan reported by the Financial Times to Greensill's Australian holding company to push an unrealized capital increase in 2020.
According to reports from Switzerland, Credit Suisse also personally manages Lex Greensill as a client of its asset management.
True to the motto "Entrepreneur
Bank
", CEO
Thomas Gottstein
protected the relationship with Greensill - until it no longer worked.
David Cameron
Icon: enlargePhoto: LILLIAN SUWANRUMPHA / AFP
Ex-British Prime Minister David Cameron, who hired Greensill as a consultant in 2018, has to fear his reputation - it was supposed to be one of the few, carefully selected commitments in business after the end of his political career, but in a small circle Cameron gave, according to "Financial Times "says his stock options of up to 1 percent in Greensill could make him rich.
It doesn't look like that today.
Greensill, honored by Prince Charles for his services to the British economy with an order of commandery, made full use of his proximity to London power.
There were also government contracts during the Corona crisis, for example to accelerate the payment of employees in the health service or to pay out company aid.
Leon Black
Icon: enlargePhoto: Lucy Nicholson / REUTERS
The career of the founder of private equity firm Apollo seems to be on the decline.
Because of his ties to Jeffrey Epstein,
Leon Black,
69, has announced his retirement.
However, he is still in office, is making a name for himself with a nine-figure income for 2020 - and now as a possible savior for Greensill.
Apollo would like to buy out at least profitable parts of the business.
Tamaz Georgadze
Icon: enlarge Photo: Vincent Isore / imago images / IP3press
German private investors come
into play
with
Tamaz Georgadze's
Raisin (Weltsparen) company
- and its competitors such as Deposit Solutions.
Fintech firms have steered investor money in the direction of Greensill in search of large-scale returns.
Raisin has already stated that it is about several hundred million euros.
According to a list by finanz-szene.de, Greensill Bank has deposits of 3.3 billion euros, a good billion of which are attributable to private investors.
Accordingly, it is the largest moratorium ever imposed by the Bafin with the participation of private investors.
Where are there still high interest rates?
Where there is also high risk.
ak