Loans To Sean Quinn & The Quinn Group
On 30 March 2010, following an application by Ireland's Financial Regulator, the High Court appointed joint provisional administrators to Quinn Insurance Limited. According to the Irish Independent, eight subsidiaries of Quinn Insurance provided guarantees of €1.2bn to cover Quinn Group's debts, prompting the regulator to seek the appointment of provisional administrators in the High Court. In total the Quinn family is estimated to have €2.8 billion of loans from Anglo Irish Bank and the QUINN group has an additional €1.2 billion of loans. Of these circa €780 million need to be re-financed this year.
Given the magnitude of the loans to Anglo Irish Bank the company was reported to be considering a €700 million financial rescue of the QUINN group. The plan, would see €150 million injected into Quinn Insurance and €550 million would be used to pay off bondholders. Anglo Irish Bank would become the majority shareholder in the Quinn Group. This would be, in effect, a hostile takeover and as it will be done by a government agency - the nationalization of a private company by fiat.
The QUINN group has taken action to counter the moves by the Financial Regulator including the mobilisation of its employees into street protests. The Group furthermore has rejected press speculation that the Group needs €700m of financing. Instead the Group estimates that a cash injection of between €100m and €150m is required. refusing to speculate on the need for a €550 million payment to bondholders, it noted that a re-financing, if it occurred, would not necessarily increase the overall debt of the Group.
On 12 April 2010, the Financial Regulator and QUINN group were due in the High Court. The decision on a permanent appointment of administrators was postponed by one week, following a last minute submission of documents by the Quinn Group. The company pledged to work hard to seek a resolution to the uncertainty created by the appointment of provisional administrators to Quinn Insurance. On 15 April 2010, the Irish Times reported that Quinn Insurance decided not to fight the appointment of a permanent administrator.
Read more about this topic: Anglo Irish Bank, Controversy of Business Practices & Loans
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