(Bloomberg) – Credit Suisse Group AG says it has made a payment of $ 400 million to investors in its supply chain finance funds who have invested in Greensill products, its fourth such payment to affected clients by liquidation.
The Aug.6 payment brings the total paid out to investors in the funds to around $ 5.9 billion, according to a Q&A update on the bank’s website on Tuesday. The total cash position of the funds is around $ 7 billion, or about 70% of assets under management when they were suspended, he said.
Greensill’s collapse marked an early reversal of CEO Thomas Gottstein’s tenure, before the bank was hit by the even larger collapse of hedge fund client Archegos Capital. After Greensill, Gottstein replaced head of asset management Eric Varvel and removed the company from direct supervision of wealth management.
The bank had said it expected to make a fourth payment to Greensill investors when it released its second quarter results on July 29.
The bank marketed its popular supply chain finance funds as one of the safest investments it offered, as the loans it held were backed by bills typically paid within weeks. But as the funds turned into a $ 10 billion strategy, they moved away from that ground and much of the money was loaned through Greensill against expected future bills. , for sales that were simply predicted. The business quickly collapsed after Greensill lost trade credit insurance on many of its notes to less creditworthy borrowers.
Credit Suisse is seeking to recover $ 2.5 billion in overdue loan repayments. Sanjeev Gupta’s GFG alliance, one of the biggest exposures to problems, is in talks to restructure and refinance assets in the US and UK, and advanced negotiations are underway for them. GFG’s Australian activities, according to the Q&A.
Earlier this year, the lender filed “liquidation petitions” against a number of GFG group companies. A first hearing on Credit Suisse’s attempt to push them into insolvency has been postponed until next year, giving Gupta more time to secure funding for its metals empire.
The bank has also filed complaints in connection with the US bankruptcy process of construction start-up Katerra Inc., previously backed by Softbank Group Corp. and began talks to restructure the exposure of US coal miner Bluestone Resources.
The bank also made an initial claim on the overdue notes that were covered by insurance, and is preparing to do more through Greensill’s banking arm. He estimates consulting and other collection costs for this year at $ 145 million.
(Add details of court proceedings in seventh paragraph.)
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