SCF market hopes to avoid contagion risk as Greensill empire collapses

Industry insiders are hopeful that access to funding and insurance will remain resilient across the wider supply chain finance (SCF) market, despite the disastrous collapse of London-based behemoth Greensill. Though Greensill’s demise is rooted in its exposure to GFG Alliance, a network of companies linked to metals magnate Sanjeev Gupta, its collapse last week was triggered by the loss of insurance cover for high-yield investment products and a subsequent freeze on funding from Credit Suisse. There had been hopes that despite Greensill filing for administration in a London court on Monday, private equity investors would be able to salvage the company’s SCF business, which sources describe as robust and insulated from the company’s GFG-related activities. But as of press time, serious doubts are arising over that proposed acquisition, opening up the possibility that other SCF providers and funders could be called upon to step into the gap left by Greensill’s collapse. That has prompted efforts from industry groups to reassure funders and insurers over the safety of SCF as a product. The Global Supply Chain Finance Forum (GSCFF), an industry association comprising several influential trade finance bodies including the International Chamber of Commerce, says it is “aware of recent concerns… continue reading

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