Apollo Global Management abandons talks to buy parts of Greensill

The suitor has reportedly abandoned a proposed $59.5m deal to acquire Greensill’s intellectual property and IT systems, as well as its admin services business.

Lex Greensill reportedly warned Credit Suisse for weeks that he was having difficulty securing fresh credit insurance

Apollo Global Management has abandoned talks with Greensill’s administrators to buy parts of the ailing finance business, according to a report in The Financial Times.

Citing people familiar with the matter, the FT said Apollo had walked away from the proposed $US59.5m deal to acquire Greensill’s intellectual property and IT systems, as well as its admin services business, Finacity.

It comes as international media also reports founder Lex Greensill warned major lender Credit Suisse for weeks that Greensill was having trouble securing fresh insurance to replace lapsed policies.

Apollo’s U-turn also comes days after talks between the two parties broke down when Taulia, Greensill’s technology partner for a number of high profile clients, secured $US6bn ($7.76bn) in funding from a consortium led by JPMorgan to keep its platform running.

The San Francisco-headquartered company provides the platform for companies to charge their smaller suppliers a fee for early payment. Greensill had been the financier for a range of Taulia’s clients, leading the company to source additional funding following Greensill’s collapse.

But Taulia’s entire business was not exposed completely to Greensill’s insolvency, with the US group ending its exclusivity arrangement with Greensill in 2019. Since then, Taulia has embarked on a multi-funder model to diversify its funding and give clients choice over financiers.

The end of Taulia’s exclusivity arrangement with Greensill was a speed hump for Apollo’s plans to buy most of Greensill’s assets.

As previously reported by The Australian, Taulia had been in discussions with Apollo and was happy to add it to its list of funders but would not return to an exclusive arrangement, which would have added more value to an Apollo/Greensill deal.

Elsewhere, Bloomberg reports Lex Greensill warned Credit Suisse for weeks that he was having difficulty in securing fresh credit insurance ahead of the supply-chain financier’s spectacular collapse.

Grensill relied heavily on insurance as part of its business model, lending money to companies to pay their suppliers, with insurance in place to protect it against defaults.

But the decision by its insurers to not renew its policies, which lapsed on March 1, led Credit Suisse to freeze $US10bn worth of funds associated with its financing activities.

The Australian arm of Greensill Capital was on Tuesday placed into administration after it warned it was in “severe financial distress” and unable to repay a $US140m loan to Credit Suisse.

Grant Thornton was appointed as the administrator of Greensill’s Australian operations on Tuesday morning, hours after the same administrator was appointed in the UK.