Greenhill, a British financial company that provides short-term supply chain financing for businesses, has declared bankruptcy after suffering a series of financial difficulties. The bankruptcy administrator, Massive United International Accountants, said on the 8th that Greenhill’s bankruptcy, fearing that it would trigger tens of thousands of people worldwide to lose their jobs. According to rumors, the U.S. private equity firm Apollo seeks to buy some of Greensill’s assets.
Greensill, whose main business is to provide short-term supply chain financing, is now facing funding problems of its own, and their opaque and complex accounting methods have raised more and more questions from the outside world.
Greensill filed for bankruptcy in a British court on the 8th, noting that their biggest customer, British steel and aluminum major GFG Alliance, had begun to default on its debts.
Greenhill’s financial problems have deteriorated rapidly as its main credit insurer stopped providing credit insurance for $4.1 billion of debt in its portfolio on January 1. Its portfolio clients include Swiss bank Credit Suisse.
Greenhill’s bankruptcy has left more than 50,000 people, including the group itself and its clients, at risk of losing their jobs, including more than 7,000 in Australia.
Grant Thornton said on Monday: “Chris Laverty, Trevor O’Sullivan and Will Stagg of Grant Thornton UK have been appointed as Greenhill’s advisers. Stagg have been appointed as joint insolvency administrators of Greensill Capital UK Limited and Greensill Capital Management Company Limited. “
Sources close to the matter confirmed a Financial Times report that U.S. private equity firm Apollo is seeking to buy some of Greensill’s assets.
Both Greenhill and Apollo have been tight-lipped with the media about the purchase.
According to the Australian Financial Network, Greenhill’s market value of about A$6 billion ($4.642 billion) was suddenly hit by a huge lightning strike, but the root of the deadly trouble was already laid. Greenhill, through its subsidiaries, packaged loans for supply chain finance and sold them in the form of funds. And the main underwriter, Credit Suisse, had specifically asked the insurance company to guarantee the product in order to give it a rating.
On the other hand, an Indian steel company, Gupta, an important customer of Greenhill, started lending more than half of the total loan volume of one of Greenhill’s banks. Upon investigation, there was no collateral to be found for this huge loan.
The insurance company withdrew its guarantee and Gupta refused to continue paying principal and interest due to problems with its funding sources, causing Greenhill to file for Chapter 11 bankruptcy. Overnight, the company went from a market value of several billion Australian dollars to absolutely nothing.