Updates from Credit Suisse Group AG

West Virginia Governor Jim Justice has offered to pay Credit Suisse $ 300 million and offer half of the proceeds from the sale of his mining business to settle debts owed to the chain’s funding funds. procurement related to Greensill Capital.

Bluestone Resources, the justice-run coal mining empire, has borrowed heavily from Greensill, the financial firm whose bankruptcy in March sparked a lobbying scandal in the UK and damaged Credit Suisse’s reputation.

Greensill had loaned $ 690 million to Bluestone with funds raised through Credit Suisse funds. Bluestone wrote to Credit Suisse last week with the proposal to settle the debts, which was first reported by The Wall Street Journal.

In the letter, Bluestone said it was negotiating a $ 300 million refinancing deal with an anonymous party and that it would pay the money to Credit Suisse funds, according to people familiar with the letter.

The offer also included half of the proceeds, net of any debt, from a future sale of Bluestone, although the letter does not contain details of whether such a transaction is imminent.

A person familiar with Credit Suisse executives thinking on the proposal said they would consider opening talks on a deal, but there was some skepticism as to whether the refinancing could be achieved and how much value it would remain. in the business.

Credit Suisse announced on Monday that an additional $ 400 million would be repaid to the 1,000 high net worth clients trapped in supply chain funds, bringing the total returned to $ 6.3 billion of the $ 10 billion held in the funds. funds when they were suspended in March.

Bluestone was one of three creditors of the funds, including Sanjeev Gupta’s GFG Alliance and bankrupt US construction firm Katerra, which Credit Suisse identified as problematic. The trio collectively owe Credit Suisse funds $ 2.3 billion.

“Credit Suisse Asset Management is doing everything in its power to maximize the recovery of our fund investors,” the bank said. “If delinquent debtors make proposals to us, we will of course examine them. “

A justice spokesperson did not respond to a request for comment at the time of posting.

Bluestone and its related companies had become one of Greensill’s biggest customers before its dramatic collapse, with the finance company arranging corporate finance tied to the coal miner’s bills.

Greensill had a partnership with Credit Suisse, which repackaged the debt and sold it to investors in several supply chain finance funds. The 1,000 fund investors have threatened lawsuits because they stand to lose billions, despite the Swiss bank marketing the funds as fully insured and low risk.

Bluestone was Greensill’s first customer to take legal action. He filed a lawsuit in March in Manhattan federal court against the company and its founder, Lex Greensill. Justice added that his mining empire itself could fail due to the “sudden and unwarranted abandonment” of the finance firm.

In the company’s initial complaint, Bluestone claimed it was unaware of Credit Suisse’s involvement in the loans until February of this year. He initially refused to reimburse the bank.

Additional reporting by Stefania Palma


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