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Artis Finance, a recently collapsed invoice financing company that is the majority of TDR Capital Executives, has told his lenders that important documents that it had “misunderstood the health of his portfolio.”
Artis, based in London, applied for an administration last week and became the newest collapse of a company that specializes in loans against outstanding accounts between companies.
Artis sent a notification to its bondholders on Wednesday and revealed that during a study it discovered that “changes were made” in documents that “misunderstood the true performance of his portfolio.
The notification added that these changes were made to so -called recent service reports, which investors in effects set by assets depend on the financial health of the underlying loans that support their bonds.
Wrong presentation of cases included that “certain financial covenants were reported as when they were not actually met”, according to the notification of the bond holder. The managers of Artis at PWC have started a “forensic investigation into these things,” it added.
Artis financed his invoice-supported loans through a securitization vehicle that is legally separated from the company requested for administration. Last month, Artis revealed to bondholders that more than 24 percent of the loans in the underlying portfolio was more than 60 days late, which activated a standard on the bonds.
Caisse de Dépôt et Placement du Québec, one of the largest pension funds in Canada, has the greatest exposure to the bonds of Artis, according to people who are familiar with the issue. CDPQ owns $ 105 million of the $ 260 million outstanding bonds, according to one of those people.
“We keep a close eye on the situation and maintain a dialogue with the manager,” said CDPQ.
The collapse of Artis is a further blow to the market financing market, whereby money is lent against the invoices that support the sale of goods.
The implosion of Greensill Capital in the midst of fraud accusations in 2021 the pitfalls in the sector seemed. More recently, the VK Fintech Stenn entered the administration in December after the lender, HSBC, “extensive and systemic” issues had discovered with invoices it had financed.
The collapse of Artis is also a black eye for TDR, one of the most prominent private equity companies in the UK that co-ownership of supermarket group Asda. Former and current TDR partners Grégoire Paepegaey and Gary Lindsay were withdrawn earlier this month as directors of the Holding of Artis, two days before the company applied for an administration.
The TDR Fund, which had a majority interest in Artis, only contained the personal money of some of the company’s managers, according to people who are familiar with the case, instead of the institutional investors of third parties who support the buy-out funds.
Artis’s managers and TDR refused to comment.
Artis mainly financed medium -sized raw materials traders, many of which were located in the United Arab Emirates and Asia.
The company previously supervised borrowing to a company linked to Indian metal trader Prateek Gupta, who accused Giant Trafigura of the raw material trade of limiting a scammer of $ 577 million in 2023.
Gupta has previously denied misconduct and disputes with Trafigura. At the end of 2023, Artis brought its own lawsuit against the companies of Gupta in the London Supreme Court. Gupta did not immediately respond to a request to ask for comments.
A report from Augustus of specialized creditworthiness agency KBRA noted that 80 percent of the portfolio in the Securitization Vehicle of Artis was supported by trade credit insurance. However, almost a quarter of this insurance came from an insurer established in Guernsey who is owned by the holding of Artis, however.
Investors have also had problems claiming this form of insurance in cases where fraud is suspected, with legal fights on Greensill’s insurance contracts still in the courts in the VK and Australia four years after the company collected.