Greensill Capital seeks insolvency protection in Australia
Greensill Capital has sought insolvency protection in Australia as it comes under further pressure after Credit Suisse suspended funds investing in its products.
The beleagured firm, advised by former Prime Minister David Cameron, is reportedly looking to invoke “safe harbour” protection in Australia, according to the Financial Times.
This would protect directors from personal liability for a company trading while insolvent. Although the company is largely based in London it is registered in Australian city of Bundaberg, the hometown of founder Lex Greensill.
It comes just a day after Credit Suisse suspended $10bn of redemptions and subscriptions on a range of funds linked to Greensill.
The firm specialises in supply-chain finance where businesses borrow money to pay bills. Last year Greensill, which says it is “making finance fairer” was hit after a number of its clients defaulted on their debts amid high-profile collapses and accounting scandals.
Today GAM Investments announced it had closed its GAM Greensill supply chain finance fund “as a result of recent market developments” ending their five-year business relationship with the firm.
Chief executive Peter Sanderson said the decision was in the “best interests of all clients in the fund” and that there were no valuation concerns with the fund.
Greensill has also had the government guarantee on some loans removed, Sky News reported on Monday. The company had been admitted to the CBILS scheme for large companies but after an investigation was found to have breached the terms of the loans.
Greensill was approached for comment.