Quinn Direct Family lead by Sean Quinn owes 2.8 Billion that will never be recovered and the Tax Payer will pay the Bill.
The Quinn Group is to undergo major financial and corporate restructuring following the appointment of a receiver to the Quinn family’s share in the business by Anglo Irish Bank.
Seán Quinn and his family will no longer have any role in the management, operations or ownership of the group under the plan, which was announced today.
In a statement, the Mr Quinn and the Quinn family said they "considering" the announcement and would not be commenting further.
Mr Quinn, formerly Ireland's richest man, was unable to repay €2.8 billion in loans that built up through borrowings from Anglo Irish that he used to fund massive share investments in the bank. Other lenders to the Quinn Group are owed some €1.28 billion.
Kieran Wallace of KPMG has been appointed share receiver and will take control of the family’s interests in the group. Mr Wallace will oversee the appointment of a new board of directors.
Anglo chief executive Mike Aynsley said the appointment would have no impact on the day-to-day operation of the company. "A share receiver is different from normal receiver, which takes over the assets of a company," he said.
Mr Aynsley said that there "will no doubt be some write offs" associated with the overall level of debt owed to Anglo Irish Bank by Mr Quinn.
Quinn Group chairman Pat O’Neill said an agreement in principle had been reached with its lenders on a way to restructure its debt. This is expected to relieve the manufacturing side of the group of some €500 million of debt over a period of five years.
The Quinn Group is involved in the manufacture of glass, insulation materials, packaging, plastics and radiators. More than 2,600 are employed in the group’s manufacturing activities, with 1,000 of the jobs in Ireland.
Mr O’Neill said the restructuring would provide financial stability and sustainability to the group.
“We do not anticipate job losses from or related to this restructuring,” he said. “On the contrary it will help to protect jobs. There are no plans whatever to break-up the manufacturing businesses.”
Minister for Finance Michael Noonan welcomed the debt restructuring plan agreed between Anglo Irish and the Quinn lenders. “This structure will enable the good and strong businesses to continue to trade and grow. It is particularly important that there will be no impact on employment, on trade creditors or on day-to-day operations of the Quinn Group,” he said.
Lenders to the Quinn Group, including Irish and other international institutions, said they looked forward to working with the newly appointed board.
"The debt restructuring plan includes a substantial debt reduction on the group’s manufacturing operations which will provide the foundation for the Quinn Group’s future growth and success," they said in a statement.
The Quinn Group has also announced the appointment of a new chief executive. Paul O’Brien (43), currently a non-executive director of Quinn Group having joined the board last November, is to take over from Liam McCaffrey.
Mr O’Brien was chief executive of Four Leaf Investment NV, which operates a number of hotels in Belgium and France. He previously worked with Compaq and UTV Media plc.
It was also announced today that a joint venture of US insurer Liberty Mutual and Anglo Irish Bank have been selected as the preferred bidder for the general insurance business of Quinn Insurance Ltd.
While the deal has yet to be finalised and the contracts of sale have yet to be signed, it is envisaged there will no job losses among the insurance firms 1,570 employees in the Republic or Northern Ireland as a result.
If successful, the bid would see Liberty Mutual, the fifth largest insurer in the US, take complete responsibility for the operation of the new business.
Joint administrators Michael McAteer and Paul McCann said Anglo would have no involvement in the day-to-day operation of the new company, but would act in a loan recovery capacity.
Quinn Insurance was placed in administration in March of last year at the request of the Financial Regulator.
Mr O’Neill said Mr Quinn had deservedly earned the respect for the work he did starting and building up the Quinn Group businesses.
“Sadly, in more recent years a number of well-publicised events have left the manufacturing group with substantial borrowings which, quite simply, the group could not service. If these debts were not restructured, the businesses could not survive in their present form,” he said.
Mr Quinn stepped down as head of the group in May of last year. His family owned as much as 28 per cent of Anglo Irish Bank at one point, having built their shareholding through contracts for difference, which did not require them to reveal their stakebuilding.
The stock declined rapidly as the financial crisis worsened, eventually wiping out Mr Quinn’s €2.8 billion investment after Anglo was nationalised in January 2009.
