Credit Suisse will bear certain collection costs of the Greensill Fund

(Bloomberg) – Credit Suisse Group AG has said it will shoulder “as much as possible” the legal and advisory fees to recover cash for investors in the supply chain finance funds it manages with the now defunct Greensill Capital.

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The majority of the expenses incurred to recover the money were not passed on to investors, Credit Suisse said in a statement on Wednesday. He estimates he will spend around $ 145 million on the process in 2021.

Read more: Credit Suisse Says It Made $ 400 Million Greensill Payment

Credit Suisse’s asset management arm “assumes these expenses as much as possible and will seek to recoup the amount that has been committed where appropriate,” he said. Part of the turnaround work is carried out by the bank’s own teams and these costs will be absorbed by the bank.

The Swiss bank managed a series of funds which invested in notes issued by Greensill Capital, a specialist lender which was put under administration in March. Expenses incurred include advisory fees, money to continue operating Greensill’s infrastructure and ongoing costs of the fund, he said.

Late payments

Credit Suisse is still trying to collect $ 2.7 billion in delinquent loans. The majority – $ 2.3 billion – rests with problem borrowers Katerra Inc., GFG Alliance Ltd. of Sanjeev Gupta and Bluestone Resources Inc. All three are in the process of restructuring and the bank has said it needs more time to assess investors’ share of the money it will get back.

Refinancing and restructuring discussions are underway regarding GFG Alliance assets in the United States, United Kingdom and Australia. Katerra is in a US Chapter 11 process and a liquidator has been appointed. The bank said it has started conversations with Bluestone and its shareholders to reach an agreement on the payments, which is unlikely until the fourth quarter. The company is offering $ 300 million and half the value of its business to repay loans from Greensill Capital that ended up in Credit Suisse funds, Bloomberg reported.

Read more: Bluestone offers Credit Suisse $ 300 million in Greensill Row (1)

The remaining $ 400 million is due to late payments from debtors at risk of being insolvent or unable to refinance. The bank said it could expect recovery of more than 90% but less than 100% of the total value of these loans.

Police raided the offices of the Swiss lender in Zurich last week to confiscate documents as part of an investigation into whether investors in the Greensill funds were misled. The public prosecutor has opened proceedings against a “representative” of Greensill as well as unknown persons.

Although neither the bank nor the current or former employees are persons of interest in the investigation, the classification of “unknown persons” gives prosecutors reviewing the case more leeway to name more people or entities. commercial as and when they are investigated.

Read more: Credit Suisse offices in Zurich raided in the Greensill probe (3)

The bank marketed its supply chain finance funds as one of the safest investments it offered, as the loans it held were backed by bills typically paid within weeks. But as the strategy developed, they moved away from that land and much of the money was loaned through Greensill against future expected invoices, for sales that were just land.

(Updates to fifth paragraph with details on loan repayments, collection expectations, and last week’s office raid.)

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