In the United States today, Federal Deposit Insurance Corporation continued the auction process for the beleaguered Silicon Valley Bank, with final bids closing by Sunday afternoon, according to Bloomberg.
An agreed sale, if any, may not be known until late Sunday. It is still possible that the deal will not go through and the bank will go bankrupt. SVB had over $175 billion in deposits and he had $209 billion in total assets. The FDIC is reportedly looking to make at least some of its customers’ uninsured deposits available starting Monday.
U.S. Treasury Secretary Janet Yellen said on Sunday that the government would not bail out Silicon Valley banks with public money, but depositors, mostly tech companies, reeling from the worst bank failure since the 2008 financial crisis. ), he added. As TechCrunch previously reported, the Silicon Valley banking crisis affects companies thousands of miles away. For example, more than 60 YC-backed Indian startups have more than $250,000 of him stuck in SVB accounts.
And that’s just the tip of the overseas iceberg.
Across the Atlantic, after a frenzy weekend involving regulators and the UK government, Silicon Valley Bank UK Limited (SVB-UK), a legally separate company from US SVB, will file for bankruptcy this evening (Sunday 12th). I plan to enter. March 2023) as reported yesterday. The move was confirmed today by London law firm Osborne Clarke.
This has meant that SVB-UK customers will not be able to withdraw or deposit money into their banks, resulting in major liquidity problems for many depositors and borrowers, and for many tech startups to take important actions such as paying their employees. It means that it can no longer run.
UK tech entrepreneurs and VCs have lobbied the UK government to step in and provide support to affected depositors and borrowers or facilitate the sale of banks.
On Sunday morning, the UK government was drawing up plans for some sort of emergency cash lifeline for tech companies.
Prime Minister Jeremy Hunt told Sky News: Or even avoid the loss of the most promising companies altogether. “
In a statement, the prime minister warned that the sector was a “serious risk” and a “high priority” for the government, “treating this issue as a high priority” and “avoiding or minimizing it.” We are working quickly to find a solution for this.” Damage some of Britain’s most promising companies. “
A source told Techcrunch that this could come in the form of a “bounceback loan approach” that would allow SVB-UK’s tech clients to borrow from a major UK bank.
However, as of Sunday evening UK time, despite much speculation about a potential buyer for SVB-UK, there was no clear solution.
A joint letter signed by more than 200 tech executives over the weekend says many companies face “technically insolvent” after the collapse of SVB UK.
Responding to developments following the failure of Silicon Valley Bank, British Private Equity and Venture Capital Association (BVCA) Executive Director Michael Moore said: We welcome the Prime Minister’s update that the government is announcing support for affected businesses. This is an urgent matter. I need help by tomorrow. The direct impacts of technology and the broader private capital ecosystem are far-reaching. This is for many highly skilled jobs. “
Dom Hallas, executive director of Coadec, a UK policy group representing tech startups, said: We have engaged with the UK government, including the Treasury and No10, regarding potential impacts. “
UK companies can only recover £85,000 under the Financial Services Compensation Scheme or £170,000 in joint accounts. With SVB UK he has over 3,500 customers and many accounts reaching into the millions, things look bleak. SVB UK reportedly had close to £7bn in deposits when the BoE deemed it insolvent on Friday.
In other developments, Sky News and Evening Standard reported on Sunday that Barclays and Lloyds Banking Group have been approached by the government for an urgent takeover deal.
In addition, a new clearing bank, the Bank of London, was also named as a potential suitor by the BBC.
Sky News also reported that Oaknorth Bank, a British “neobank” or digital lender previously valued at nearly $3 billion, may offer to buy SVB-UK, the sources said. , a formal offer lasts “several days” that may require due diligence.
Oaknorth, who declined to comment, was co-founded by Rishi Khosla, who donated hundreds of thousands of pounds to Britain’s ruling Conservative Party.
The FT reports that SVB-UK’s field of buyers could also include Abu Dhabi’s state-owned holding company ADQ and listed conglomerate IHC.
Bloomberg noted that Sheikh Thanoon, chairman of the Royal Group, oversees Wealth Fund ADQ, First Abu Dhabi Bank PJSC, Emirati’s $790 billion Wealth Fund and Abu Dhabi Investment Authority.
And as Sunday progresses, HSBC Holdings and JP Morgan were said to be potentially among them Considering acquisition of SVB-UK.
