Creditors meeting to lift the lid on Greensill exposure

Picture: AFP

Anticipation is building ahead of Friday’s Greensill creditors meeting, with observers keen to find out exactly which groups have exposure to the failed supply chain lender.

While names such as CIMIC, Telstra, Coles and Woolworths have all been mentioned as having used Greensill’s trade finance in the past, one of the smaller companies that has emerged with some exposure is Earlypay.

Ikka Tales, Greensill’s head of Asia-Pacific as of February, is on the board of Earlypay and the two companies have had a trading relationship stretching back to when the business floated.

Earlypay is a cashflow finance provider that deals in invoice and debtor finance, invoice factoring and debt factoring, invoice discounting, equipment finance and trade finance.

A company spokesman said Earlypay’s exposure to Greensill represented less than 10 per cent of its total facilities and was not material. The company has a $100.7m market value and listed about 10 years ago.

For the six months to December, Earlypay generated $21.8m of revenue and $3.5m of adjusted net profit.

When Earlypay listed on the Australian Securities Exchange it said it had an arrangement with Greensill for a back-to-back invoice facility with a maximum total liability of $10m.

Advisers are swarming over Greensill and its main client GFG Alliance after Greensill went into administration at the start of the month.

McGrath Nicol has been hired as a receiver by Credit Suisse, which is owed $US140m by Greensill, along with law firm Gilbert + Tobin.

GFG’s Australian steel manufacturing business InfraBuild is working with EY.

Greensill is being assisted by law firms Herbert Smith Freehills and Allen and Overy, while Grant Thornton is the administrator. Brookfield is said to be considering an acquisition of the $1.5bn-odd InfraBuild and has tapped PwC to carry out due diligence.

One deterrent could be cross guarantees between the steelworks at Whyalla and InfraBuild, sources say.

The South Australian government wants the the steelworks to survive.

GFG Alliance is said to owe about $US5bn to Greensill and is a negotiating a standstill agreement. Greensill’s operations collapsed after Credit Suisse stopped investors from moving money in or out of the $US10bn in supply-chain investment funds.

The move was triggered after Greensill lost coverage from a set of credit insurers that provided protection in case the start-up’s clients defaulted.

The insurance was crucial because it made Greensill’s assets appear safer to Credit Suisse’s institutional investors.