Apollo Global Management’s plan to buy parts of collapsed finance company Greensill Capital is looking doubtful after a key partner moved to secure its own finances, media reported on Wednesday.
The US private equity company halted talks to buy parts of Greensill due to an escalating stand-off with US company Taulia, which once provided technology to the supply chain finance group, the Financial Times reported, citing people familiar with the matter.
Talks were throw into disarray after Taulia looked to move its users to other providers, primarily the US bank JPMorgan. The tech firm supplies the digital platform most of Greensill’s customers use to manage their working capital.
Taulia secured a $6bn (£4.3bn) facility, including $3.8bn from the New York-based bank, Bloomberg reported.
The controversial type of financing that Greensill provided was raised against invoices between companies and their suppliers, but the SoftBank-backed company had little in the way of its own technology to track the flow of these corporate bills.
Instead, its customers used platforms from tech groups to digitise this process, with Taulia’s systems servicing key Greensill clients such as pharmaceutical group AstraZeneca.
Taulia told the FT its clients wanted “flexibility in the source of funding”.
“Following the recent, well-documented challenges faced by Greensill we have been working to ensure that our clients have continued choice over their funding sources and continuation of funding,” Taulia added.
Apollo, Greensill and JPMorgan declined to comment.
Apollo only wanted the parts of Greensill that would give it access to financing lines with large companies such as telecoms group Vodafone. It had no interest in taking on any financing for Greensill’s largest customer, industrialist Sanjeev Gupta’s GFG Alliance, according to the FT report.
Greensill disclosed in its administration filing earlier this week that Apollo had offered $59.5m for its intellectual property and IT systems, which would have involved it taking on “the majority” of the more than 500 employees of its UK business. The US group was “the only credible bidder”, court documents said.
The crisis over the $10bn supply chain finance funds came to a head last week when Credit Suisse was forced to suspend the four funds, driving Greensill to file for insolvency this week.
