Greensill-Apollo Talks Derailed as Tech Partner Becomes Rival
(Bloomberg) -- Greensill Capital’s talks to sell parts of its operating business to Athene Holding Ltd. were derailed after one of the firm’s key technology partners received funding that allows it to finance Greensill’s most creditworthy clients directly.
Taulia, a financial technology company that had worked closely with Greensill, landed a $6 billion liquidity facility from banks including JPMorgan Chase & Co., according to people with knowledge of the matter. Taulia’s clients had an immediate need for liquidity because of Greensill’s insolvency, one of the people 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. 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 U.K. 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 U.K. court filings. The two sides held talks for at least a week, with Athene offering about $60 million for Greensill’s IT and intellectual property, according to court documents.
The end of the talks probably leaves founder Lex Greensill without other options to save his firm. The startup 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.
JPMorgan, which is an investor and strategic partner for Taulia, provided $3.8 billion of the facility, 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. More banks may be added, another said.
Representatives for Apollo, Greensill, Taulia, JPMorgan and UBS declined to comment. A UniCredit spokesperson didn’t immediately respond to requests for comment. JPMorgan’s involvement was reported earlier by the Wall Street Journal.
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. Around 90% of Greensill’s business derived from just five clients, according to court documents.
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 will be financed going forward, Bloomberg reported on Tuesday.
Taulia has sought to diversify its business beyond Greensill, and the firm signed a strategic alliance with JPMorgan in April 2020. Taulia funded its notes exclusively through Greensill until 2019, and the vast majority of Greensill’s investment-grade funding deals come from Taulia, according to people familiar with the matter.
Greensill collapsed into insolvency in little over a week once the lack of confidence began to sweep across the financial world. Greensill 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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