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Lex Greensill and Sanjeev Gupta are both at the centre of the collapse of Greensill and the knock on effects.Credit:The Age

Greensill,which was preparing for a sharemarket float as recently as October,provides a controversial service known as supply chain financing,buying invoices from big companies and paying their suppliers early for a fee.

Greensill then arranges for those payments to be packaged up and rolled into securities that are then sold by Credit Suisse.

The company’s biggest customer is British billionaire Sanjeev Gupta who owns the Whyalla steel mill in South Australia. Greensill has estimated as many as 50,000 jobs globally,including 7,000 in Australia,could be at risk from its collapse by reducing the flow of funds to its customers.

Leaders from the Australian Workers Union have been in rolling meetings with Mr Gupta’s local representatives amid concerns about the facility’s future. “Our members have worked extremely hard to get these steel operations humming and profitable and they don’t deserve to be swept up in all this,” AWU national secretary Daniel Walton said.

Separately,IAG was forced to update the market after its shares tumbled 10 per cent amid concerns,first revealed byThe Age andThe Sydney Morning last week,of its exposure to Greensill. Shares of IAG,which operates insurance brands including NRMA and CGU,recovered slightly after it denied exposure but still closed down 4 per cent as investors digested the news.

Greensill had been expecting to offload large parts of its operating business to Athene,an investment house backed by US group Apollo Global Management. But those deal talks have stalled,according to reports,after talks between the new potential owners and a key Greensill client,technology group Taulia,fell apart.

Founded by Bundaberg raised Lex Greensill in 2011,the eponymous financing firm had grown in just ten years to be a sprawling international financial services house. The success vaulted Mr Greensill and his two brothers Peter and Andrew into the nation’s financial elite,with their combined wealth estimated at more than $1.3 billion.

Mr Greensill’s family was already well known in Bundaberg where it owns a sprawling farming empire. The family company confirmed this week it was not under any financial pressure.

Greensill’s financial troubles came to a head last week whenCredit Suisse froze $10 billion of funds that provided capital to Greensill.

It emerged last week that Greensill had known for at least six months that IAG’s partners would not renew insurance over $US4.6 billion of assets held in the Credit Suisse funds. Greensill declined to comment on its administration referring inquiries to its administrators at Grant Thornton in the UK and in Australia.

Last week it also emerged that Mr Gupta’s GFG Alliance has stopped payments to Greensill,putting further pressure on the finance group. GFG Alliance confirmed it is in talks with Greensill to stop Greensill from immediately calling in its debts – a move that could put huge pressure on Mr Gupta’s vast steel empire.

A spokesman for GFG said:“We are currently in dispute with Greensill regarding the loan facility. In the circumstances we can make no further comment”.

The Whyalla steel mill was salvaged from administration in 2016 following the collapse of its former owner Arrium. Workers were caught off guard by the Greensill related financial difficulties and Mr Walton said the overwhelming priority for the union was shoring up the long-term viability of jobs at the mill that employs over 5,000 staff.

“Profitability is strong and global prospects are good,which is a very different situation to the Arrium crisis of 2016.”

“We will continue to work closely with management and government to ensure the fundamentally strong Australian steel-making businesses continue to thrive.”

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