Liquidation of the Italian company Aigis Banca
Italian bank Aigis collapsed following Greensill Capital’s debacle over GFG Alliance invoices, the Financial Times (FT) reported on Monday (May 24th).
Aigis, based in Milan, was a specialist lender for small and medium-sized enterprises (SMEs). The Bank of Italy ordered the sale of the assets and accounts of the lender to its competitor Banca Ifis, also a specialist lender for SMEs.
“The intervention of Banca Ifis will protect the savings of retail clients, ensure the continuity of business financing and preserve jobs,” Banca Ifis CEO Frederik Geertman said in a statement, via FT.
Greensill Capital lends money to vendors based on the value of their unpaid invoices less a discount. The loans are then packaged in the form of notes and sold to investors and banks, which would have included Aigis de Sanjeev Gupta (formerly known as the metallurgical group GFG Alliance).
The Italian bank’s problems are believed to be related to billing investment products purchased from Greensill, sources told FT. Some investments included asset-backed notes linked to Gupta’s GFG.
Greensill’s collapse was in part triggered by Sanjeev Gupta’s GFG alliance, which depended on Greensill for funding. GFC, a metals conglomerate, has defaulted on its debt to Greensill and is now struggling to stay in business, FT reported.
The assets acquired by Banca Ifis d’Aigis include nearly € 300 million (over $ 366 million) in SME loans and € 440 million (nearly $ 540 million) in customer deposits.
The UK’s Financial Conduct Authority (FCA) has opened an investigation into Greensill Capital UK and Greensill Capital Securities. The watchdog also reviews Mirabella Advisers, who oversees Greensill Capital Securities.
The collapse of Greensill follows the freezing of $ 10 billion in investment funds by Credit Suisse Group AG. GAM Holding has also frozen its own investment linked to Greensill.