Businessman cedes control as receiver appointed

MANUFACTURING BUSINESS:FERMANAGH-BORN businessman Seán Quinn yesterday lost control of his industrial manufacturing empire after Anglo Irish Bank appointed a share receiver to Quinn Group ROI Ltd.

The move secures Anglo’s charge over the assets of the manufacturing business and other entities in the wider Quinn structure, which were pledged by the family as security against its €2.88 billion loans to the State-owned bank.

This debt relates largely to Mr Quinn’s ill-fated share-buying spree in Anglo prior to the financial crash in 2008.

Anglo’s surprise move followed months of negotiations with about 60 lenders and bondholders of Quinn, who between them were owed €1.28 billion. Under a five-year investment plan put together by Anglo and Quinn’s lenders and bondholders, the manufacturing business will be relieved of €500 million of this debt with the balance held on its books.

In return, the lenders and bondholders will get a one-quarter equity share in the business with Anglo holding the balance.

Kieran Wallace of KPMG was appointed as share receiver to Quinn Group ROI Ltd.

This is the entity that owns the shares in Quinn Group Ltd, a Northern Ireland-registered operating entity with 6,121 employees. It in turn is the parent of the group’s building products, glass, plastics and radiator business. They operate in Ireland, the UK and Europe.

The four divisions had a combined turnover of almost €800 million before the group ran into trouble in 2008. Earnings before interest, tax deprecation and amortisation was around €185 million at that stage.

A statement from Quinn Group’s lenders said they believed the restructuring would “provide the foundation” for the company’s “future growth and success”.

Based in Derrylin, Quinn grew from a small quarrying operation to a global business with interests in manufacturing, financial services and hospitality.

There has also been a shake-up of Quinn Group’s senior management and the board of directors.

Paul O’Brien has taken over as chief executive from Liam McCaffrey, a long-time sidekick of Mr Quinn. Mr O’Brien is a non-executive director of Quinn Group having joined the board in November 2010. He was formerly chief executive of Four Leaf Investment, which operates hotels in Belgium and France.

Mr O’Brien has also worked on turnaround projects in the construction and medical sectors and is a former group finance director of media group UTV.

Pat O’Neill remains as chairman but five directors have stepped down from the board, including Mr Quinn and his daughter Patricia. Kevin Lunney, David Mackey and Dara O’Reilly also left the board yesterday.

Quinn Group’s new non-executive members are: Jimmy Menton and Ray Jackson, both formerly of KPMG; Rory O’Ferrall, formerly of Deloitte; Frank O’Riordan, formerly head of law firm AL Goodbody, John Boyd, former director of the global restructuring group at Ulster Bank; and Timothy Quin, a former chairman of Touche Ross in Northern Ireland.

Mr O’Neill said the restructuring was “essential for the survival of the businesses”.

The manufacturing entity comprises glass, construction services, insulation materials, packaging, plastics and radiators.

It employs about 1,000 people in Ireland. Mr O’Neill said these staff would be protected due to the changes and there would be no change in terms and conditions of employment. Mr O’Neill said Mr Quinn had “deservedly earned the respect and admiration of people all over Ireland for the work done in starting and building up the Quinn Group businesses to the level they have reached today.

“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.”

Mr O’Neill said the businesses had the “capacity” to serve “customers at competitive prices”.