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Client issues mounting for Greensill as COVID-19 wreaks havoc


In Australia, Greensill has faced press criticism amid concerns that some of its clients, most recently CIMIC’s UGL business, have been pushing out payment terms beyond the acceptable 30 day limits and forcing any supplier who wishes to be paid earlier to pay fees or accept discounts.

Greensill has many successful big-name clients including Telstra, Vodafone and Airbus. But it has also provided supply chain finance to less successful groups. One of its recently collapsed clients is scandal-plagued London-listed hospital operator NMC Health, which called in administrators last month.

Another client of Greensill, controversial rent-to-buy retailer BrightHouse also entered into administration in late March. The group also provided financing to Singapore-commodities trader Agritrade which collapsed amid fraud allegations from its lenders.

Under its arrangement with Credit Suisse, Greensill and insurers have to cover the losses incurred by the Credit Suisse funds caused by the collapses of Brighthouse, NMC and Agritrade.

The Credit Suisse funds annual report shows the funds had a nearly $US120 million ($186 million) exposure to NMC Health, BrightHouse and Agritrade at the end of October. Assets under management in the Credit Suisse supply chain finance funds shrunk to $7.5 billion from $9.1 billion in February.

Greensill declined to comment on the matter, referring inquiries about the performance of the funds to Credit Suisse.

A spokesman for the investment bank said investors had benefited from the solid performance of the supply chain funds it manages, including throughout the current crisis. “Any other suggestion is misleading.” He said all the funds were fully insured and only sold to sophisticated investors.

In response to the rush of redemptions in February, the spokesman said: “Despite the adverse markets, the supply chain finance funds of Credit Suisse Asset Management have shown a very strong positive performance year-to-date, outperforming almost all fixed income markets and peers. All redemptions have been met and the assets under management is now up 15 per cent year on year.

Greensill separarely on Thursday said it had issued formal notices to some clients that it would drop them unless they ensured its supply chain finance facilities were not being used to push out payment times to suppliers.

The statement came amid speculation that one Greensill client, contracting giant CIMIC’s engineering business UGL was continuing to put pressure on its suppliers.

A spokeswoman for CIMIC declined to say whether it or any of its subsidiaries had received the notice from Greensill.

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Small Business Ombudsman Kate Carnell welcomed the commitment by Greensill to dump clients who are pushing out payment terms beyond the 30 days.

She said it was clear Greensill’s statement is in relation to its dealings with contractor UGL, owned by construction firm CIMIC.

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