Demise of Greensill sparks jobs panic

Bankruptcy creates massive uncertainty for clients who depended on its finance services

LONDON:

The collapse of British finance firm Greensill has sparked panic and threatened 50,000 jobs, in particular at the sprawling steel empire of Indian-British billionaire Sanjeev Gupta.

Greensill specialised in short-term corporate loans via a complex and opaque business model that ultimately sparked its declaration of insolvency on Monday.

The bankruptcy marks a major fall from grace for a company that won a key $1.5 billion investment from Japan’s SoftBank in 2019 - and employs former British prime minister David Cameron as adviser.

Its demise has now created massive uncertainty for clients, who depended on its finance services to pay their bills and could now potentially default on payments and lead to further turmoil.

“For companies reliant on its service, the great scramble has begun to find other ways of covering the looming cavern in their finances,” said Susannah Streeter, an analyst with financial services company Hargreaves Lansdown.

“Those investors who had bought the debt sold on the market are now staring at potentially big losses.”

Greensill’s failure has put 50,000 jobs at risk, both at the London-headquartered group and across its customer base. One that could be hit hardest is Gupta’s GFG Alliance empire, which has 35,000 staff worldwide, including Britain where its Liberty Steel division employs 5,000 people.

Bloomberg news reported that Greensill had close links with Gupta, who told the financial news agency in October that it was the company’s biggest lender.

Sanjeev Gupta himself met for “productive” talks with trade unions in Britain on Tuesday, GFC said in a statement.

Published in The Express Tribune, March 11^th, 2021.

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