With Greensill reportedly entering insolvency in Britain, Credit Suisse can kiss off a bridge loan it made to tide the niche financier over until a planned public offering this year.
U.K. supply chain specialist Greensill Capital is applying for administration, the «Financial Times» (behind paywall) reported on Monday, as well as shortly after «The Wall Street Journal» (behind paywall). The move topples a supply chain finance empire that until just months ago was seeking a $7 billion valuation in a public listing.
For Credit Suisse, it is the first financial domino to fall: the Swiss bank has little hope of recouping an $140 million bridge loan it granted to Greensill in October of last year. Lawyers for Greensill said the firm had «no conceivable way» of repaying the Swiss bank, which had called the loan, according to the British outlet.
Manifold Entanglements
The $140 million loan is likely to be a minor financial hit in what promises to be a reputational nightmare for Credit Suisse, as finews.com reported on Monday. The bank appears to have pursued a «one-bank» approach to Greensill as well as founder Lex Greensill, with entanglements in wealth management and investment banking, besides the fund management ties.
Last week, Credit Suisse pulled the plug on a $10.1 billion line of supply chain funds it co-manages with Greensill. The Swiss wealth manager's retreat as well as the loss of insurance cover on its assets set into motion Greensill's administration.
