ANGLO IRISH Bank will seek an early engagement with the administrators of Quinn Insurance as it seeks to maximise the chances of recovering its €2.8 billion debt from the Quinn family.
Sources said yesterday that Anglo’s objective was to avoid a firesale of Quinn Insurance, which could in turn have a “domino” impact across Quinn Group. The bank has proposed a €700 million bailout for the group, which would see it take a substantial shareholding and restructure its debts.
Quinn’s management team sees merit in Anglo’s proposals. The bank has already met Murdoch McKillop, the corporate rescue expert drafted in by Quinn Group for financial re-engineering purposes. Quinn Insurance was placed in formal administration by the High Court on Thursday, after its owners, Quinn Group, dropped opposition to the move.
The formal appointment of Michael McAteer and Paul McCann of Grant Thornton as administrators will, in theory, allow them to begin talking to potential buyers.
The administrators’ short-term objective, however, is the reopening of Quinn Insurance’s UK business, which was closed for new business on the request of the Financial Regulator at the end of last month. It is likely the regulator will allow the reopening of some lines of the UK business early next week.
The regulator’s office confirmed yesterday that “prompt consideration” was being given to proposals from the administrators “with a view to lifting parts of its direction on certain business lines of Quinn Insurance Ltd UK”.
A decision will be made “within days”, a statement said, adding that consultations with the Financial Services Authority in the UK would take place. The normalisation of the Quinn Insurance business is seen as key to making a success of the administration, which arose after the discovery of loan guarantees by certain of the company’s subsidiaries. It is thought the board of Quinn Insurance was unaware of the guarantees’ existence until last month.
A functioning UK business would also reassure the 1,430 Quinn Insurance staff who are focused on that market. Senior officials from the regulator’s office yesterday met representatives of Quinn Group’s staff to discuss the administrators’ appointment. Quinn Insurance employees are meanwhile scheduled to meet politicians, including Minister for Finance, Brian Lenihan, on Monday.
Mr McKillop, who has been appointed an interim director of Quinn Group, has met the group’s bondholders as well as engaging with Anglo Irish. As matters proceed, he could also become involved with asset sales or seek new investment for the company.
