LONDON (AFP) – Troubled British financial firm Greensill broke into administration after running into serious financial trouble, administrator Grant Thornton said on Monday, sparking fears of thousands of jobs around the world.
Greensill specializes in short-term business supply chain financing, but faces itself with financing problems and growing questions about opaque and complex billing methods.
The government is capping a troubled March for Greensill, the collapse of which puts more than 50,000 jobs – including over 7,000 in Australia – across the corporation and its customers at risk.
“Chris Laverty, Trevor O’Sullivan and Will Stagg of Grant Thornton UK LLP have been appointed joint administrators of Greensill Capital (UK) Limited and Greensill Capital Management Company Limited,” Grant Thornton said in a statement on Monday.
“The Joint Administrators are in ongoing discussions with an interested party regarding the purchase of certain assets from Greensill Capital.
“As these discussions are ongoing, it would be inappropriate to make any further comments at this point.”
Sources close to the matter confirmed a Financial Times report that US private equity firm Apollo wanted to buy parts of the group.
However, the paper warned that an Apollo bailout would not include loans to the GFG Alliance Group led by Indo-British steel billionaire Sanjeev Gupta.
Greensill attorneys appeared in a UK court on Monday and stated in court documents that the company was “in dire financial straits” and could no longer pay its debts, the FT said.
Both Greensill and Apollo have declined to comment on the matter.
Greensill got into a crisis a week ago when lender Credit Suisse raised $ 10 billion in funds.
Greensill attorneys said Monday that Credit Suisse had requested repayment of a $ 140 million loan – but admitted that the company had “no conceivable way” to repay the sum.
The financier also has a $ 5.0 billion stake with GFG Alliance Group, which Greensill lawyers have also said is in financial trouble.
The financial company, headquartered in London, was founded in 2011 by Australian Lex Greensill with activities in Australia and the USA.
Administration refers to the process by which a troubled company brings in outside expertise in an attempt to minimize job losses.