UK financial firm Greensill falls into insolvency

LONDON (AFP) – Struggling British financial firm Greensill has collapsed in administration after running into serious financial difficulties, administrators Grant Thornton said on Monday, sparking fears for thousands of jobs around the world.

Greensill specializes in short-term supply chain finance for businesses, but faces funding challenges itself and growing questions about opaque and complex accounting methods.

The administration is ending a crisis March for Greensill, whose collapse risks creating more than 50,000 jobs – including more than 7,000 in Australia – across the group and its customers.

“Chris Laverty, Trevor O’Sullivan and Will Stagg of Grant Thornton UK LLP have been appointed joint directors of Greensill Capital (UK) Limited and Greensill Capital Management Company Limited,” Grant Thornton said in a statement on Monday.

“The joint administrators are in ongoing discussions with an interested party regarding the purchase of certain assets of Greensill Capital.

“As these discussions are ongoing, it would be inappropriate to comment further at this time.”

Sources familiar with the matter confirmed a Financial Times report that US private equity firm Apollo was looking to buy parts of the group.

The newspaper, however, warned that any bailout of Apollo would not include loans to the GFG Alliance group led by Indo-British steel billionaire Sanjeev Gupta.

Lawyers for Greensill appeared in a UK court on Monday, saying in court papers that he had “fallen into serious financial distress” and could no longer pay his debts, the FT said.

Greensill and Apollo declined to comment on the matter.

Greensill was thrown into crisis a week ago when lender Credit Suisse suspended $10 billion in funds after it discovered that $4.6 billion of insurance underpinning Greensill’s contracts had expired.

Lawyers for Greensill said on Monday that Credit Suisse had demanded repayment of a US$140 million loan – but admitted the firm had “no conceivable means” of repaying the sum.

The financier also has a US$5.0 billion exposure to the GFG Alliance group, which is also facing financial difficulties according to lawyers for Greensill.

The London-based finance company was founded in 2011 by Australian Lex Greensill with operations spanning Australia and the United States.

Administration refers to the process by which a struggling business brings in outside expertise to try to minimize job losses.

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