Germany’s financial watchdog has taken direct oversight of day-to-day operations at Greensill Bank, as the lender’s ailing parent company warned that its loss of $4.6 billion of credit insurance could cause a wave of defaults and 50,000 job losses, the Financial Times reported today.

The German-based lender is one part of a group — advised by former UK prime minister David Cameron and backed by SoftBank — that extends from Australia to the UK and is now fighting for its survival. It is headquartered in the UK.

Greensill’s business provides short-term financing which gives a wide range of companies longer to pay their bills.

But several of its clients have run into difficulty and Greensill’s troubles escalated this week after two major investors in securities backed by its assets said they were to close their funds.

Swiss asset manager GAM Holding said on Tuesday that it is to close the $842 million GAM Greensill Supply Chain Finance Fund because of “market developments and resulting media coverage” related to supply chain finance.

This followed a statement on Monday by Credit Suisse which said it was to close $10 billion of supply chain funds, mostly invested in securities issued by Greensill, due to concerns about being able to accurately value some of them.

The Wall Street Journal has reported that Greensill has hired Grant Thornton for a possible restructuring.

Greensill said on Tuesday, however, that it was hoping to agree a deal that would salvage much of the company.

“While the structure of the new business is still being determined, we expect the transaction will ensure the majority of Greensill clients will continue to be funded in the same way as they currently are while also preserving a substantial number of jobs,” it said in a statement.

Greensill was founded in 2011 by former Citigroup banker Lex Greensill, and counts former British Prime Minister David Cameron as an advisor.

Earlier this week, the company, which is still registered in its founder hometown city of Bundaberg in Australia, lost an emergency request for an injunction there forcing its insurer to renew credit insurance policies on $4.6 billion worth of working capital loans to about 40 clients.

“If the policies are not renewed, Greensill Bank will be unable to provide further funding for working capital of Greensill’s clients,” its lawyers argued in the “urgent” submission, according to court documents.

“In the absence of that funding, some of Greensill’s clients are likely to become insolvent, defaulting on their existing facilities. That, in turn, may trigger further adverse consequences on third parties, including the employees of Greensill’s clients. Greensill estimates that over 50,000 jobs including over 7,000 in Australia may be at risk.”

Greensill had been trying to raise capital in recent months, with Greensill saying it had ambitions to float within two years.

The WSJ on Monday reported that Credit Suisse was trying to reduce its exposure to Greensill Capital because of concerns over Greensill’s exposure to metals tycoon Sanjeev Gupta.

GAM’s share price collapsed in 2018 following the closure of another fund that had bought bonds issued by Gupta’s GFG and were structured by Greensill.

GFG has declined to comment on Greensill. Previously it has said it had met all its obligations attached to its bond issues.

GAM said that the Greensill supply chain fund, whose closure it announced on Tuesday, was made up only of investment grade assets and they do not have any “valuation concerns”.

“As such we anticipate an orderly liquidation and return of client assets in the normal course,” said Peter Sanderson, GAM’s chief executive.

($1 = 0.7183 pounds)