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October 26, 2021 – Freshly detached from the Greensill Capital Inc. Chapter 11 case and now owned by White Oak Global Advisors, LLC (“White Oak”), Finacity Corporation ("Finacity") teamed up with German Banking giant DZ Bank in a 2.5-year, $150 million trade receivables securitization for the Greenwich, CT Nitron Group ("Nitron"). The newly arranged facility is collateralized by Nitron’s receivables for fertilizer distribution and importation services in Latin America, North America, Europe and Africa.
In an interesting juxtaposition of fortunes, October 26th is also the date of the Chapter 11 Plan confirmation hearing for Greensill Capital Inc. which acquired Finacity in June 2019 but was forced to put it on the section 363 auction block with the sudden collapse (into administration) of its own parent Greensill Capital Management (UK) Limited (we cover the Greensill Capital Inc. bankruptcy separately).
In a press release heralding its return to the receivables portfolio business (actually the fourth deal announced since purchased by White Oak in mid-September), Finacity noted that it had "served as the transaction administrator and provided analytic and structuring support to DZ Bank, which served as the agent for the transaction and funded the transaction via its ABCP conduit, Autobahn Funding Company."
On August 18th, the Court hearing the Greensill Capital case issued an order approving the sale of the Greensill Capital Inc. 100% ownership interest in Finacity to White Oak for consideration that included $7.0mn of cash and the release of any liability in respect of earn-outs owed members of the founding Katz family (valued at $21,216,000, of which $15,912,000 had been asserted as administrative expense claims). The sale closed on September 20th, with Adrian Katz (who had looked, with members of his family (the "Katz Parties") to buy Finacity himself before the Katz Parties were supplanted as stalking horse…and eventual successful bidder…by White Oak) remaining as Finacity CEO and substantive equity holder.
For the Katz Parties, largely collateral damage in the Greensill collapse, this looks to be a happy ending, going from a ship sinking with up to $21.2mn of earnouts owed to them by the bankrupt Greensill Capital Inc. (the earnouts part of the consideration when they sold to Greensill in 2019) to apparently having part or all of those earn-outs covered by White Oak and having equity in the ongoing Finacity business.
For more on White Oak's significant role in the wider Greensill capital structure (and its relationship with Greensill's Sanjeev Gupta), see the FT's piece from May.
About Finacity, a White Oak Company
Finacity, a White Oak Company, specializes in the structuring and provision of efficient capital markets receivables funding programs, supplier and payables finance, back-up servicing, and bond administration. Finacity currently facilitates the financing and administration of an annual receivables volume of approximately US $100 billion. With resources in the USA, Europe Latin America and Asia, Finacity conducts business throughout the world with obligors in 175 countries. Finacity, is affiliated with White Oak Global Advisors, LLC, a leading alternative debt manager specializing in originating and providing financing solutions to facilitate the growth, refinancing and recapitalization of small and medium enterprises.
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