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The fall of Greensill and the future of supply chain finance
By S. Alex Yang, Lisa Duke
In March 2021, Greensill Capital, the UK-based leading supply chain financing provider, with 16 offices across the world, filed for insolvency; its Germany-based bank closed by regulators. Less than two years earlier, Greensill had received a $1.5 billion investment from SoftBank’s Vision Fund, valuing the company at $3.5 billion. By 2020, the company was targeting a $7 billion valuation with a potential IPO. Supply chain finance was a centuries-old method that enabled companies to better manage their working capital. Greensill had ridden the wave of technological advances to bring supply chain finance into the 21st century, but it had spectacularly failed. The repercussions of this failure touched SoftBank, Credit Suisse and the steel empire of Sanjeev Gupta, and stretched across the globe, potentially putting tens of thousands of jobs at risk. The failure also revealed one of the biggest lobbying scandals to hit the UK Government. What caused the epic fall of Greensill? And how would it affect the future of supply chain finance?
- Understand the basics of working-capital management and supply chain finance
- Identify innovative mechanisms in supply chain finance
- Analyse the scope and application of FinTech in supply chain finance
- Develop an understanding of different types of risk – market, credit, and operations, and how they should be managed.
- Develop an appreciation of how a business should be developed and grown responsibly, especially when multiple stakeholders (customers, investors, business partners, and government/taxpayer) are involved
|Publication Date:||September 2021|
|LBS Case Code:||CS-21-013|
|Topic:||Management Science and Operations|
|Subjects:||Crisis management, Financing, Supply chain finance|
|Geography:||International, United Kingdom|