Greensill Capital Ltd’s talks to sell parts of its operating business to Athene Holding Ltd were derailed after banks — including JPMorgan Chase & Co — extended a lifeline to a key technology partner of the collapsed lender, people with knowledge of the matter said.
Taulia, a financial technology company that counts JPMorgan as an investor and strategic partner, landed a US$6 billion liquidity facility, including US$3.8 billion from the New York-based bank, with participation from UniCredit SpA and UBS Group AG, said some of the people, who asked not to be identified because the matter is private.
Taulia’s clients had an immediate need for liquidity because of Greensill’s insolvency, one person said.
Photo: Fabian Bimmer, Reuters
More banks might be added, another said.
A deal between Greensill and Athene, an annuity seller backed by Apollo Global Management Inc, is now improbable, a person with knowledge of the matter said.
Losing a key technology supplier makes Greensill a less attractive target.
Greensill’s most-prized business was supply-chain financing it provided with Taulia, which now has the funding to serve clients on its own. That leaves the London-based firm with little access to investment-grade companies as prospective clients.
Greensill filed for administration in the UK on Monday, capping a stunning collapse for the specialty finance firm. Apollo emerged as the sole credible bidder for some of the company’s assets, according to UK court filings. The two sides held talks for at least a week, with Athene offering about US$60 million for Greensill’s information technology and intellectual property, court documents showed.
UniCredit began working with Taulia with a collaboration announced last year. The new funding for Taulia leaves Greensill without its major supplier of supply-chain financing for investment-grade firms. About 90 percent of Greensill’s business derived from just five clients, court documents showed.
Taulia provided much of the front-end technology that enabled businesses to have their supply chains financed by Greensill.
Talks between San Francisco-based Taulia and Athene were stalling over how clients that were funded by Greensill would be financed going forward, Bloomberg reported on Tuesday.
Taulia has sought to diversify its business beyond Greensill, and it signed a strategic alliance with JPMorgan in April last year. It funded its notes exclusively through Greensill until 2019, and the vast majority of Greensill’s investment-grade funding deals come from Taulia, people familiar with the matter said.
The end of the talks probably leaves founder Lex Greensill without other options to save his firm. The start-up said it was attempting to shake up working-capital finance, a low-margin business dominated by banks like Citigroup Inc and HSBC Holdings PLC. Questions around the creditworthiness of many of its borrowers led to its fall into administration.
Greensill collapsed into insolvency in a little more than a week once the lack of confidence began to sweep across the financial world.
Its backers from Credit Suisse Group AG to Softbank Group Corp and GAM Holding Corp signaled doubts about the debt, upending the multibillion-dollar empire.
Softbank’s Vision fund had substantially written down its holding in Greensill late last year.
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