THE JOINT administrators of Quinn Insurance will this week appoint an international investment bank to advise it on the sale of the Cavan-based company.
It is understood three leading global banks have been shortlisted for the role and a decision will be made in the coming days. This appointment will move a sale of the insurer significantly closer.
It is believed that the administrators – Michael McAteer and Paul McCann of Grant Thornton – have completed an information memorandum on Quinn Insurance, which will be sent to the 47 groups who have expressed an interest in buying the insurer since the High Court process began on March 30th.
The adviser appointed will be responsible for handling the sale process of Quinn Insurance on behalf of the administrators and for contacting all of the interested parties individually.
This could be a lengthy and complicated process, given the number of stakeholders involved.
Quinn Insurance is still owned by Quinn Group, the conglomerate controlled by the family of Fermanagh businessman Seán Quinn. Quinn Group has already indicated its willingness to sell its shareholding in the insurance company.
Any deal would also require the approval of the Financial Regulator and the High Court. All of the major insurance groups in Ireland – including FBD, Aviva and RSA – are believed to have expressed an interest in Quinn Insurance to the administrators.
US insurer Liberty Mutual is also interested in buying the business while Anglo Irish Bank, which is owed €2.8 billion by the Quinn family, is thought to have formulated a takeover proposal.
It is understood that the redundancy process, which aims to reduce the company’s headcount by 900, will also be finalised next week. The administrators are hopeful all job cuts will be on a voluntary basis after receiving in excess of 900 applications for the redundancy package on offer.
These redundancies represent 37 per cent of the company’s 2,450-strong workforce and is aimed at reducing Quinn Insurance’s cost base by €30 million a year and returning it to profitability. It should also make Quinn Insurance a more attractive proposition to a third-party investor.
Significant restructuring of the Quinn Insurance business has already taken place.
After being barred by the Financial Regulator from writing new business in the UK from March 30th, the administrators have since succeeded in gaining permission to reopen up to 70 per cent of that company’s lines of business by again offering quotes for motor insurance.
After previously writing loss-leading new motor policies in a bid to win market share, the administrators have moved to ensure Quinn Insurance’s UK arm is only issuing policies that will earn a profit.
On May 19th Colin Morgan stepped down as chief executive of Quinn Insurance after seven years with the business to “pursue other opportunities”. The administrators have no plans to replace Mr Morgan.
In a report presented earlier this month to the president of the High Court, Mr Justice Nicholas Kearns, the administrators said a review by auditors found that Quinn Insurance had underprovided for liabilities by €68 million last year.
The court was told the company made a loss of €47 million in 2009.
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