Embattled financial startup Greensill Capital plans to file for insolvency in the U.K. this week, as it simultaneously moved toward a deal to sell its operating business to Apollo Global Management APO, -1.69%, according to people familiar with the matter.
The deal with Apollo, which could be struck by the end of the week, would be part of a Greensill insolvency, similar to the U.S. bankruptcy process, the people said.
The Wall Street Journal previously reported the two sides were in talks for a deal that would pay Greensill around $100 million. Through the acquisition Apollo would take over Greensill’s core operations and inherit clients that generate around $7 billion in assets, according to the people familiar with the matter.
Author(s): Julie Steinberg and Ben Dummett
Publication Date: 3 March 2021
Publication Site: MarketWatch
Specialty finance firm Greensill Capital headed toward a rapid unraveling after Credit Suisse Group AG suspended $10 billion of investment funds that fueled the SoftBank Group Corp.-backed startup.
With a key source of financing frozen, Greensill appointed Grant Thornton to guide it through a possible restructuring, and it could file for insolvency, the U.K. equivalent of bankruptcy, within days, according to people familiar with the company.
U.K.-based Greensill is the brainchild of former Citigroup Inc. and Morgan Stanley financier Lex Greensill. Founded in 2011, Greensill specializes in an area known as supply-chain finance, a form of short-term cash advance that lets companies stretch out the time they have to pay their bills.
Greensill packages those cash advances into bondlike securities that give investors a higher return than they could get from bank deposits. Credit Suisse’s funds were a major buyer of those securities.
Author(s): Julie Steinberg, Duncan Mavin, Ben Dummett, Maureen Farrell
Publication Date: 1 March 2021
Publication Site: Wall Street Journal