The future receivables product at the heart of Greensill’s controversial dealings with GFG Alliance is highly unusual and beyond the risk appetite of the wider trade and supply chain finance industry, insiders say. Greensill’s sudden collapse in early March was triggered when billions of dollars of insurance cover expired overnight, prompting Credit Suisse to suspend investment funds relied upon by the London-headquartered financial institution. GTR has since found the company started contingency planning for insolvency as early as last year. It has emerged that Greensill’s widely publicised exposure to GFG Alliance companies – a loose network of businesses with ties to metals magnate Sanjeev Gupta – was rooted in financing it made available based on anticipated invoices that had not yet been issued. GFG admitted in February it had become “particularly reliant on GCUK’s [Greensill] ‘future accounts receivable finance’ programme, whereby GCUK provided funding to GFG against expected future invoices”, according to court documentation from Greensill’s administration hearing in London. Details around such programmes remain scarce, but 2019-20 accounts unearthed by AFR show that Liberty Primary Metals Australia – which owns steel and coal operations in Australia – had a facility worth hundreds of millions of dollars based on future… continue reading
Continue reading Greensill’s future receivables product a “rogue outlier”, industry says. This article appeared first on CTRM Center.
Source: CTRM Center