SoftBank-backed startup Greensill faces bankruptcy after Credit Suisse freezes $10 billion in funds over asset values, report says
- UK-based Greensill is facing bankruptcy after
Credit Suissefroze $10 billion in funds tied to the firm.
- Credit Suisse had grown concerned over Greensill's ties to steel magnate, Sanjeev Gupta, the Wall Street Journal reported.
- A second Swiss
lender, GAM Holding, also suspended an investment fund connected to the financefirm.
SoftBank-backed Greensill Capital is facing bankruptcy after Credit Suisse froze $10 billion worth of
The Swiss bank said on Monday it suspended the funds because some assets in them are "currently subject to considerable uncertainties with respect to their accurate valuation."Greensill has appointed Grant Thornton to guide it through possible restructuring, and it could file for insolvency within days, WSJ said, citing sources. The lender is also exploring a potential sale of its operating business for $100 million, representing a fraction of its peak valuation of $4 billion, to private-equity firm Apollo Global Management.
Greensill did not immediately respond to Insider's request for comment.The
Problems began when the Swiss bank grew concerned over Greensill's ties to UK-based steel tycoon Sanjeev Gupta, a former shareholder in the British startup, WSJ reported. Greensill supplied financing to Gupta, who was then able to build a metals empire by procuring failed steel mills and other distressed industrial businesses.Another reason that led to Credit Suisse's suspension is that Greensill's insurance policies, which were a key factor behind investor comfort, expired recently, according to WSJ's sources. Another Swiss fund manager, GAM Holding, also froze an investment fund linked to Greensill on Tuesday due to "recent market developments and resulting media coverage."
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