Greensill Capital files for insolvency, administrators appointed

 Greensill began to unravel last Monday when its main insurer stopped providing credit insurance on $4.1 billion of debt in portfolios it had created for clients including Swiss bank Credit Suisse.

The court document supporting Greensill’s insolvency application said without that insurance, Greensill was no longer able to sell notes backed by debts to investors, nor fund clients such as GFG in return.

“GFG has fallen into severe financial difficulty,” the court filing said. “GFG has started to default on its obligations.”




A spokesman for GFG, which is controlled by Indian-British steel magnate Sanjeev Gupta, declined to comment on the default claim in the filing, or the size of Greensill’s exposure to GFG.

Last week, GFG said it had adequate current funds and that its businesses were operationally strong.

Greensill had about $5 billion of exposure to GFG, the Financial Times reported on Monday, citing Greensill’s lawyers.

Trade unions in Britain said they would meet officials from Gupta’s Liberty Steel on Tuesday to seek assurances about jobs after Greensill’s insolvency filing.

Accountancy firm Grant Thornton said in a statement it had been appointed administrator of Greensill’s two core UK companies, which oversaw its business of buying short-term debt and converting it into bonds for sale to investors.

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