Credit Suisse reaches agreement with mining group over Greensill debt

Credit Suisse has signed an agreement with West Virginia Governor Jim Justice’s mining company to begin recovering some of the $690 million that Bluestone Resources owes clients of the Swiss bank.

Bluestone borrowed heavily from Greensill Capital, the bankrupt UK supply chain finance group that relied on some of Credit Suisse’s wealthiest clients for a significant chunk of its own funding.

In a deal announced on Friday, Bluestone will begin making regular payments to customers of the Swiss bank this month, reaching up to $260 million in total.

As the Financial Times reported last month, the Justice family also agreed to share proceeds from any sale of the business with Credit Suisse clients, although a person briefed on the arrangement said the split had not yet been defined.

If any debt remains after Bluestone’s sale, the bank plans to continue trying to recoup losses through insurance claims it has already filed.

Since the collapse of Greensill in March 2021, Credit Suisse has been under pressure to recover the money the supply chain company lent through a $10 billion group of funds set up by the Swiss bank to 1,200 of its wealthiest customers. The bank said the process could take up to five years.

“This is further evidence of our determination to prioritize returning liquidity to investors in supply chain finance funds,” said Ulrich Körner, Managing Director of Credit Suisse Asset Management. “This agreement is intended to secure further recoveries for the benefit of these investors.”

So far, it has recovered $7.3 billion. Credit Suisse is also suing British metals magnate Sanjeev Gupta for $1.3 billion that its GFG Alliance borrowed from the bank’s funds through Greensill.

The Bluestone settlement is the result of year-long discussions between Credit Suisse negotiators and the Justice family.

Last September, the court offered to pay the bank $300 million and offer half of the proceeds from the sale of the mining company to settle the debts. But the offer hinged on Bluestone negotiating a $300 million refinancing deal with an unnamed party, which did not materialize.

On the other hand, the new agreement does not rely on third-party financing. The terms of the deal have been made more palatable to Credit Suisse due to soaring prices for coal, in which Bluestone specializes.

Bluestone’s managing director, James Justice III, the governor’s son, said: “We have negotiated a settlement that allows us to take advantage of the favorable coal market conditions encountered and secure the position of mines, employees and communities. who depend on them, for the foreseeable future.

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