Barclay Clan’s Firm to Refinance $200 Million Greensill Loan

A company owned by the billionaire Barclay family is trying to refinance a $200 million loan it received from Greensill Capital, a move that would potentially offer some relief to Credit Suisse Group AG funds that invested in debt arranged by the now-defunct specialty lender.

Shop Direct Holdings Ltd. is in advanced talks to refinance the debt from Greensill, which was then sold on to funds run by Credit Suisse, according to people familiar with the matter. The loan was unpaid as of June 29, according to a Credit Suisse presentation seen by Bloomberg. However, the refinancing, which is expected in the coming days, would see investors exposed to the debt via the Credit Suisse funds made whole, the people said.

The supply-chain finance firm run by Lex Greensill collapsed in March this year, forcing Credit Suisse to liquidate $10 billion of funds that invested solely in corporate loans arranged by Greensill. While Credit Suisse has recovered and paid back $5.6 billion of the funds to investors, the Zurich-based bank has warned that there’s still uncertainty over how much of the money it will ultimately be able to recoup. Some of Greensill’s customers, including steel magnate Sanjeev Gupta, are in the process of refinancing their debts, and others could default -- potentially leaving Credit Suisse turning to Greensill’s insurers for payouts.

The dissonance between the loans Greensill’s borrowers thought they were getting, and the way these were sold to investors in the Credit Suisse fund is at the heart of the scandal that has rippled through the industry. Credit Suisse had marketed its popular supply-chain finance funds as among the safest investments it offered, because the loans they held were backed by invoices usually paid in a matter of weeks.

But as the funds grew, much of the money was lent through Greensill against expected future invoices, for predicted sales. The business unraveled in March after Greensill’s loss of trade credit insurance on many of its notes to less credit-worthy borrowers.

Shop Direct’s move to refinance the $200 million loan would come in addition to other steps it has recently taken to address obligations that are past due.

Shop Direct -- owned by the British Barclay family that also controls the U.K.’s Daily Telegraph newspaper -- had a mortgage on a property through a unit called Primevere Limited, which was financed via the Credit Suisse funds. The property, known as Skygate and located near the English city of Derby, was sold last month for around 100 million pounds ($138 million) to Blackbrook Capital, according to people familiar with the matter.

Representatives for Credit Suisse and Shop Direct declined to comment, as did a spokesman for Greensill’s administrator Grant Thornton.

Repayment Trigger

Shop Direct Holdings is the parent company for the Barclay family’s retail empire, and is the ultimate owner of Primevere Limited and The Very Group. Very is one of the largest digital retailers in the U.K., with more than 1,900 brands, according to the company’s website.

The Shop Direct exposure in one of the Credit Suisse funds corresponds to a term loan that the company used for general corporate purposes, while the Primevere loan relates to a mortgage signed to fund improvements to one of its major warehousing facilities, according to a person familiar with the matter and company filings.

The loan agreements between Shop Direct and Greensill included a clause that triggered early repayment in the event that the lender became insolvent, the person said. Shop Direct came to what is known as a standstill agreement with Grant Thornton, after Greensill’s collapse meant that they were technically in default, they said.

©2021 Bloomberg L.P.

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