Talks aimed at saving the beleaguered Quinn Insurance firm are ongoing this afternoon today as the Anglo Irish Bank seeks to take it over ahead of an administration hearing in the High Court tomorrow.
Officials from the State-owned bank are negotiating with the Financial Regulator about a possible rescue package for the troubled arm of the Quinn Group.
Quinn Insurance, owned by Sean Quinn, once the country’s richest man, is in provisional administration after regulator Matthew Elderfield raised concerns over its ability to pay claims.
It could be placed in full administration at a scheduled High Court hearing tomorrow.
This afternoon the Minister for Agriculture Brendan Smith, expressed his hope that the ongoing talks will be successfully concluded.
Speaking on RTÉ Radio Mr Smith who is a TD for the Cavan Monaghan constituency said the importance of the company as an employer in the area meant there was a 'huge public interest' in the outcome of the talks
If the bank’s plan is approved by Mr Elderfield the hearing would likely be adjourned.
Anglo, which will ultimately be refinanced by the Irish taxpayer to the tune of €22 billion, tabled a blueprint to the regulator which would see it effectively take control of the firm.
Its proposals reflect the bank’s desire to secure debts of €2.8 billion owed by the Quinn family after a complex share deal turned sour.
Two other key matters are the regulator’s aim to protect the insurer’s one million customers and the need to run the business as a going concern.
Talks between Mr Elderfield, bank officials and representatives of the Quinn Group took place yesterday but no resolution was reached.
With the court hearing looming, movement one way or the other is expected later today.
As well as Anglo’s bid, the regulator this week was reviewing the administration move and a revised business plan from Quinn.
The group said it can put the insurer on a sound financial footing by the end of the year.
It is understood Finance Minister Brian Lenihan will accept the regulator’s verdict on the proposed buy-out.
The Quinn Group was expected to fight administration after Mr Elderfield dramatically moved to wrest control last week.
Liam McCaffrey, Quinn Group chief executive, revealed the insurance wing needs up to €150 million to meet the regulator’s requirements on insurance solvency.
But he denied allegations it was facing a €700 million black hole in its books.
The company detailed the state of its finances and insisted access to money was not an issue in the event of massive claims.
It said Quinn Insurance holds €800 million euro cash and the Quinn Group, which generated cash profits of about €47 million in the first three months of this year, holds €70 million in reserve.
But Government officials suggested it could founder if Quinn does not agree to
management changes at the very top.
Joan Burton, Labour’s finance spokeswoman, called on Mr Lenihan to explain why
large scale investments by nationalised Anglo, and any potential financial exposures, were not officially made public.
One of the issues facing Quinn is guarantees certain divisions of the company gave over debts dating back as far 2005 — Anglo is owed the €2.8 billion the family while the group owes €1.2 billion euro to other influential lenders.
Mr McCaffrey also said guarantees offered between various divisions of the Quinn Group were disclosed in annual reports of subsidiaries however the regulator claimed they were not included in quarterly solvency reports.