Greensill Capital filed for administration in the U.K., capping a stunning collapse for the supply-chain finance company after key backers walked away over concerns about the valuation of its assets.
A hearing was held Monday in London to review the submission, according to court documents. Lex Greensill's eponymous company had been readying the filing since last week, after Credit Suisse Group froze and then later started winding down $10 billion of funds that bought products from Greensill. That decision set off a chain of events that also saw regulators in Germany shut down its local bank.
Greensill remains in talks with Apollo-backed Athene Holding on the sale of its operating business, according to people with knowledge of the matter, though any transaction will likely be at a fraction of the $7 billion valuation that the company had sought in fundraising talks last year when it was considering plans to go public. Separately Monday, Apollo agreed to acquire the about 65% it didn't already own of Athene for about $11 billion.
Greensill unraveled in a matter of days once the lack of confidence began to sweep across the financial world. At the heart of the trouble are loans made by its supply-chain finance business. Greensill backers from Credit Suisse to Softbank Group and GAM Holding signaled doubts about the debt, upending the multibillion-dollar empire. It also emerged that Softbank's Vision fund had substantially written down its $1.5 billion holding in Greensill late last year.
Grant Thornton has been appointed as joint administrators, and "are in continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets," the firm said in an emailed statement. Bloomberg reported last week that Greensill was in the process of filing for insolvency.
Some of the most high-profile drama last week took place in Germany, where regulator BaFin shuttered Greensill Bank and asked law enforcement officials to investigate accounting irregularities. BaFin spent months probing Greensill Bank's exposure to companies linked to U.K. industrialist Sanjeev Gupta. Greensill said it was always transparent with auditors and regulators about its approach to classifying assets.
Pressure on Greensill ratcheted up as it lost its allies, with Credit Suisse freezing and then deciding to liquidate the family of funds that invest in Greensill-sourced loans, citing "uncertainty" about the valuations of some of the debt.
GAM also said it will begin shuttering its $842 million GAM Greensill Supply Chain Finance Fund and return investors' as it sought to end its dealings with the firm. SoftBank, Greensill's biggest investor, wrote down the $1.5 billion stake held by its Softbank's Vision Fund at the end of 2020.