Specialist lender Greensill close to sale of its business
GREENSILL Capital, a specialist lender advised by former UK prime minister David Cameron, is moving closer to a deal to sell its operating business to Apollo-backed Athene Holding after a swift crisis of confidence in Australian Lex Greensill’s startup lender forced it to seek a sale to avoid collapse.
The deal talks are progressing between Greensill and the combination of Athene and Apollo Global Management, according to people familiar with the matter.
Athene is an annuity seller that’s part-owned by Apollo.
Greensill is a startup lender that finances elements of complex supply chains but has been hot by a wave of defaults.
Greensill has entered a “period of exclusivity with a leading global financial institution with a view to concluding a transaction with them this week,” the firm said in a statement yesterday.
Any deal is expected to include “large parts of Greensill’s business and its assets undermanagement,”thefirm said.
Earlier in the day, GAM Holding said it will start winding down a fund that invests in loans sourced by Greensill.
That came a day after Credit Suisse froze a group of supply-chain-finance funds that it ran with help from the Australian financier, citing “considerable uncertainty” about the valuations of some of the holdings.
The freezes on about $11bn worth of funds deprived Greensill of large buyers for his assets at the same time as regulators in Germany are putting pressure on his bank to diversify its holdings.
Apollo and Athene may provide funding for loans as part of any deal, and may look to exclude any assets they deem too risky, one of the people said. A spokesperson for Apollo declined to comment.
“While the structure of the new business is still being determined, we expect the transaction will ensure the majority of Greensill clients will continue to be funded in the same way as they currently are while also preserving a substantial number of jobs,” Greensill said in the statement.
SoftBank Group’s Vision Fund had already substantially written down its $1.5bn (€1.24bn) holding in Greensill, and was considering dropping the valuation to close to zero, people familiar with the matter said on Monday.
The writedown occurred at the end of last year, said one person.
This week marks a stark fall for a firm that in October had been considering a capital raising that would have valueditat$7bn.Atthetime,the firm said that the fundraising would help boost growth. Still, controversy has followed the fast-growing firm for several years.
In Germany, BaFin has been pressuring Greensill Bank to reduce the concentration of assets linked to UK industrialist Sanjeev Gupta, Bloomberg reported in August.
The bank has been seeking to raise money and cut its exposure to companies linked to Gupta, people familiar with the matter have said.