SoftBank Put $ 400 Million into Greensill’s months before it collapsed

Greensill, which was primarily lending cash short-term loans to companies, filed for bankruptcy this week after regulators took over their banking unit and Credit Suisse Group AG

freezing investment funds essential for start-up work.

Greensill would pack loans to companies into securities, called notes, which were bought by Credit Suisse funds and sold to investors as low-risk investments, in a money market style.

SoftBank, founder of billionaire Masayoshi Son, is a giant in the field of investment, with interests spanning microchips, self-driving cars, satellites, e-commerce and mobile networks. Japanese conglomerate’s $ 100 billion Vision Fund, and a smaller success fund, has invested in more than 80 companies. In addition to Greensill, these include Uber Technologies Inc.

and owner of TikTok ByteDance Ltd.

Greensill’s stumble is a solution for Mr. Son, after a dramatic return in 2020. When he left large sums of money from investing in WeWork’s office owner, the company’s shares fell through the pandemic and Mr. Son more blows when a big bet on a trip came hotels and guesthouses when the economy was freezing. The Vision Fund wrote their investment in Oyo Hotels & Homes more than half last year, The Wall Street Journal reported.

He then embarked on a massive series of fundraising to raise money. As the economy opened, some of SoftBank’s other tech bets prospered. In the last quarter of 2020, the Vision Fund recorded a return of $ 13 billion on its investments. DoorDash food delivery service Inc., Inc.

which went public earlier this year, was a huge success. The Vision Fund appears to be earning multiples invested in South Korean e – commerce company Coupang Inc., which is expected to go public soon at a valuation of more than $ 50 billion.

Lèirsinn Fund officials have long talked about the potential benefits of forcing their investment firms to work together. Greensill’s results show that the reality has become more complex.

The $ 400 million was the latest in a long series of complex financial arrangements between the Vision Fund and Greensill. SoftBank is preparing to write down its Greensill investment, The Wall Street Journal reported last week, citing someone familiar with the matter.

In March 2020, how Covid-19 hit markets. SoftBank has invested $ 1.5 billion in Credit Suisse-Greensill funds to help keep them working, the Journal said last week.

That money was separate from the $ 1.5 billion SoftBank Vision Fund made directly in Greensill in two parts in 2019.

Greensill used the Credit Suisse fund to lend to other SoftBank Vision Fund companies. Credit Suisse Funds in total had approximately $ 750 million of supply chain loans to Vision Fund companies at the end of March 2020, according to fund documents sent to investors.

These included the self-financing company Fair Financial Corp .; Oyo Hotels & Homes Indian Hotel Series; View glass maker Inc.

; and Chinese online car trading platform Chehaoduo Group.

In fact, SoftBank was Greensill’s largest outside sponsor, a lender through Credit Suisse funds and a lender through its Vision Fund companies.

The multiple positions began a review within Credit Suisse that led to changes around how the fund operated, the Journal reported last year. SoftBank bought its position in the fund before July last year, although loans to Vision Fund companies continued.

Another Greensill lender from the Vision Fund was US-based Katerra, a factory assembly construction contractor. In December, SoftBank invested $ 200 million in construction to help it avoid a breakup. Katerra’s chief executive told the Journal at the time that Greensill had also funded a $ 435 million pardon in exchange for a 5% stake in the company.

It was unclear how Greensill would accept the loss from forgiving the loan.

SoftBank’s $ 400 million injection into Greensill in the form of adjustable debt, one of the people said. The money was earmarked to make up for Katerra Greensill’s inability to repay, and would protect Credit Suisse investors from losing any notes related to Katerra, some said. the people who knew the issue.

Write to Julie Steinberg at [email protected], Ben Dummett at [email protected], Duncan Mavin at [email protected] and Maureen Farrell at [email protected]