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Greensill Used Credit Suisse Funds to Lend to Its Own Backers

greensill-used-credit-suisse-funds-to-lend-to-its-own-backers

Greensill Capital used Credit Suisse Group AG’s now-curtailed supply-chain funds to make a $350 million loan to one of the startup’s biggest outside backers, private-equity firm General Atlantic, according to loan documents reviewed by The Wall Street Journal and people familiar with the matter.

The previously unreported loan would be the second example of Greensill lending money to one of its part owners. Last year, executives at Credit Suisse launched a review of the funds it manages with Greensill after becoming concerned about the financial startup’s biggest investor, SoftBank Group Corp. , which also benefited from Greensill loans, the Journal previously reported.

Greensill was founded in 2011 by former Morgan Stanley and Citigroup Inc. banker Lex Greensill. It plunged into crisis on Monday when Credit Suisse froze $10 billion in investment funds that Greensill relies upon to do supply-chain finance deals, a form of short-term cash advance for companies. The Swiss bank said Friday it would liquidate the funds.

Greensill plans to file for insolvency in the coming days in the U.K. and is in talks to sell its operating business to Apollo Global Management Inc., according to people familiar with the matter. The sale would be for a fraction of its peak valuation, which was $4 billion in 2019.

The financial startup made the euro-denominated loan in 2019 to General Atlantic, which is the second-largest outside investor after SoftBank’s Vision Fund. General Atlantic used the loan to fund the acquisition of shares in a joint venture with German exchange operator Deutsche Börse AG , according to the loans documents and the people familiar with the matter.

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