Greensill Bank AG has initiated legal action against the United Kingdom government, alleging wrongful termination of a £1.5 billion loan guarantee facility. The dispute centers on the abrupt cancellation of financial support tied to a critical infrastructure financing arrangement.
- Greensill Bank AG filed suit against the UK government over termination of a £1.5 billion loan guarantee.
- Termination occurred on December 12, 2024, allegedly without valid contractual grounds.
- Liquidity declined 37% in three months post-termination.
- Credit rating dropped from BBB+ to BB- following the event.
- Legal outcome may influence future public-private infrastructure financing agreements.
- Other lenders and infrastructure firms are assessing risk exposure amid ongoing uncertainty.
Greensill Bank AG, the Zurich-based financial entity formerly linked to the collapsed Greensill Capital network, has formally launched litigation against the UK government. The bank claims the Department for Business, Energy and Industrial Strategy (BEIS) unlawfully terminated a loan guarantee agreement worth £1.5 billion without due cause or adherence to contractual terms. The guarantee was intended to facilitate long-term financing for infrastructure projects, with Greensill serving as the intermediary lender. The termination occurred in late 2024, following a shift in government policy toward stricter scrutiny of third-party credit guarantees. Greensill asserts that at the time of termination, all covenants had been met and no default or breach of contract had occurred. The bank maintains that the decision undermined investor confidence and caused significant reputational and financial damage, citing a 37% drop in its available liquidity within three months of the withdrawal. Key figures in the case include the original £1.5 billion guarantee amount, the date of termination (December 12, 2024), and the subsequent decline in Greensill’s credit rating from BBB+ to BB- by global ratings agencies. These developments have strained Greensill’s ability to secure new financing despite having a clean track record on prior obligations. The lawsuit could have broad implications for public-private infrastructure partnerships across Europe. Other financial institutions involved in similar guarantee structures are monitoring the proceedings closely, while infrastructure developers relying on Greensill's funding channels face potential delays in project execution. Legal experts suggest the outcome may set precedent on the limits of governmental discretion in modifying financial commitments under private contracts.