Specialist finance firm Greensill Capital headed for a rapid collapse after Credit Suisse Group AG suspended $ 10 billion in mutual funds that fueled the SoftBank Group Corp.-backed startup.
With a key source of funding frozen, Greensill appointed Grant Thornton to guide him through a possible restructuring, and he could be declared insolvent, the British equivalent of bankruptcy, in a few days, according to people familiar with the company.
Greensill is simultaneously in talks with private equity giant Apollo Global Management Inc. to sell its operating business for about $ 100 million, according to people familiar with the talks. Although a settlement would not be for all of Greensill’s assets, the amount represents a small part of its maximum valuation of $ 4 billion.
UK-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 financing, a form of short-term cash advance that allows companies to extend the time they have to pay their bills.
Greensill packages those cash advances into bond-like securities that give investors a higher return than they could get from bank deposits. The Credit Suisse funds were a major buyer of those securities, giving Greensill the firepower to expand his business. Investors in the funds include pensions, corporate treasurers, and wealthy families.