The Swiss bank's repayments to clients now total more than half of the total $10.1 billion volume in troubled supply chain funds.
Zurich-based Credit Suisse on Friday disclosed the third leg of repayment to clients who are nursing losses from a line of funds co-managed with Greensill, in a statement on its website. The repayment of $750 million brings the total returned to clients thus far to $5.6 billion.
The funds are at the center of a complex network which includes Lex Greensill, insurers, industrial investor Sanjeev Gupta, and Softbank. Their blow-up in March led to the demotion of several executives and the ring-fencing of asset management. The bank has enlisted a raft of lawyers, advisers, and other specialists for insurance and credit to untangle and liquidate the funds.
In-House Expertise
On Friday, Credit Suisse also fleshed out questions of insurance as well as troubled obligors like Gupta's group of companies and insolvent construction start-up Katerra. The bank admitted its supply chain funds had also bought so-called futures receivables – a controversial form of debt instrument – as well as actual invoices.
The Swiss bank said it will handle the funds' dissolution itself as opposed to handing it over to a third-party liquidator. «..we have extensive expertise in debt recovery, which we are leveraging for the benefit of the funds,» the bank said. It said it «has been working closely with Grant Thornton,» the administrator of Greensill Capital U.K.
Hitching Fortunes
GFG, which controlled by Gupta, Katerra, and Bluestone account for the biggest chunk of uncertain monies: $2.3 billion. Credit Suisse has hitched its fortunes to Gupta, who like associate Lex Greensill was also reportedly a client at its private bank.
Separately, Gupta is wrangling with Swiss commodities giant Glencore to refinance $500 million in debt weighing on aluminium assets, the «Financial Times» (behind paywall) reported on Friday. If successful, it would allow Gupta to maintain control of a valuable part of his empire, including a smelter in Dunkirk.
