Investec loan book sale a sign for Greensill administrators

Greensill Capital founder Lex Greensill. Picture: Annabel Moeller

Greensill’s administrators are believed to be considering a move to sell off its distressed Australian loan book after a recent sale of a $1.2bn debt portfolio by Investec drew strong interest from credit funds.

Investec confirmed on Wednesday that it had offloaded the portfolio of Australian leveraged finance and asset-backed loans to Sydney-based Metrics Credit Partners.

DataRoom first tipped that Metrics was circling the portfolio along with Bank of America, Macquarie Group, Deutsche Bank and Amicaa after revealing on February 15 the assets were on the market.

The auction that was triggered by Investec’s retreat from the Australian market drew strong interest and saw the portfolio sell at only a slight discount or at book value.

However, unlike a number of debt portfolios that have previously been on the market, this portfolio had only a limited number of distressed assets, including loans to three groups, one of which is Bis Industries which has recovered from financial challenges in recent years.

The understanding is that all options remain on the table with Greensill’s administrators at Grant Thornton, with a global loan portfolio also considered.

Credit funds have been circling, say sources, with typical names to emerge being Oaktree Capital Management, Kohlberg Kravis Roberts, Varde Partners, The Carlyle Group, Apollo Global Management, Bain Capital, Deutsche Bank and Soliton Capital.

The thinking is that a portfolio of Greensill loans to Australian corporates with a face value of about $1bn could be placed on the market, with some of the exposure being to Sanjeev Gupta’s GFG Alliance.

The Australian has reported that creditors have hit the Australian arm of the supply chain financier for $4.8bn in claims.

Greensill filed for insolvency this month after it failed to strike a deal to renew its policies with its insurers and Credit Suisse froze $US10bn ($13.1bn) of investment funds, comprising debt securities it issued comprising Greensill loans. The failed lender has law firm Allen and Overy offering assistance as well as Grant Thornton, but an investment bank may enter the frame should a loan portfolio sale get under way.

Greensill’s largest customer was GFG Alliance that is said to owe at least $US5bn to Greensill and has been trying to achieve a standstill on its payments.

GFG’s operations include the Whyalla steelworks in South Australia and the profitable steel products manufacturing business InfraBuild. The South Australian town of Whyalla is heavily reliant on the steelworks for the town’s employment.