According to a press report, the main Swiss bank Credit Suisse wants to claim initial insurance claims for billions of losses from the so-called Greensill fund.
The focus is on Japanese insurance group Tokio Marine, the Financial Times wrote (Financial Times, Wednesday), citing the people involved.
As the insurance claims claim, insurance coverage for the funds, which have been integral to the business model of supply chain finance funds set up with Greensill Capital, will be tested, the paper writes. Credit Suisse announced at the beginning of March that it would liquidate Greensell funds of approximately $10 billion (€8.2 billion). So far, it has paid off about $4.8 billion in investor funding.
Insurer Tokio Marine questioned the validity of the insurance cover in March after German financial regulator Baffin launched a criminal complaint against the management of German subsidiary Grensel Bank. Although Grencelle took the insurance coverage to finance the trade, Credit Suisse paid the premiums and was entitled to compensation, insiders told the Financial Times.
The first claims were not yet related to the fund’s three largest debtors, the report said. The “Supply Chain Funds” set up with Greensell Capital have claims totaling $2.3 billion against the GSG Alliance steel conglomerate of industrialist Sanjeev Gupta, US coal company Bluestone Resources and US builder Katerra, which is now working on debt restructuring.
Meanwhile, according to previous media reports, Credit Suisse is preparing a lawsuit against Japanese investment group Softbank. It is a multi-million dollar debt to construction company Katerra, of which Softbank is a major investor. The lawsuit takes place in parallel with the insurance claims.
Supply chain funds invested in supplier claims against companies: Instead of waiting for the company to pay, the suppliers sold the claims at a discount to Greensill Capital, bringing those claims into the investment fund.
In the Swiss trade, the CS titles temporarily lost 0.21 percent to CHF9.62.
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