The Swiss bank has received nearly $100 million from one of the most worrisome obligors in its Greensill fund line, and expects more over the next two years.
Zurich-based Credit Suisse said GFG made good on A$129 million ($98 million) agreed as part of debt restructuring of mining and steel works in Whyalla and a coal mine in Tahmoor, both in Australia. The Swiss bank has hitched its fortunes to GFG, controlled by British industrials investor Sanjeev Gupta.
«We expect to receive further payments on a monthly basis until the remaining principal of A$240 million, including interest, has been recovered – by mid-2023 at the latest,» Credit Suisse said in a statement on its website on Thursday. In a bid to recoup the debts, the bank finds itself in the unusual position of helping breath new life into Gupta's companies.
Thorny Client
Credit Suisse said it plans to make another cash distribution out of the Greensill funds «in due course» it said. It has thus far returned $6.3 billion of the total $10.1 billion line of funds to clients.
Gupta is a thorny issue for Credit Suisse: the bank reportedly financed the mortgage for Gupta to buy an A$25 million luxury home in Sydney through an intermediary, and appears to have otherwise sold wealth management services to him, through its Australian private bank.
Wobbly Debtors
On the other hand, GFG and Gupta were the biggest client of now-insolvent Greensill Capital, which managed the supply chain finance funds that Credit Suisse plowed client money into. The bank has been forced to offer special conditions to some of those clients, a move which hasn't gone down well with certain clients.
Bluestone Resources and Katerra are the two other major uncertain obligors in Credit Suisse's Greensill funds. The former, a mining firm controlled by West Virginia's governor Jim Justice, offered Credit Suisse a deal; the latter is a U.S.-based construction company which filed for bankruptcy in June.
