Court to decide group’s future

THE future of the entire Quinn Group will most likely be determined in the High Court in Dublin on Monday.

It is believed by the financial regulator Matthew Elderfield has not changed his mind on Quinn Insurance and that he wants to have the two temporary administrators appointed full-time to the insurance group.

This issue has become highly politicised with the independence of the regulator being highlighted by some as an issue in the scramble to save the overall Quinn Group and the 5,500 jobs now under threat across the various businesses.

Taoiseach Brian Cowen added fresh impetus to the political debate yesterday. Speaking in Drogheda he said: “We have to see between now and Monday, whether it is possible for a solution to be found which will meet everyone’s requirements.”

He recognised that there were “regulatory issues” involved that need to be dealt with and resolved.

At present it looks as if two choices have emerged concerning the future of Quinn Insurance, both of which have serious implications for the Quinn Group overall and for the future of its 5,500 employees.

Of those 2,800 jobs are tied in with the general insurance business and it is that wing of the business the regulator appears intent to put under full administration if the High Court agrees to his request on Monday.

The alternative scenario is that Anglo Irish Bank would take full control of the Quinn Group at a cost of €700m.

The Quinn family owes the bank a whopping €2.8bn and the deal would leave Anglo with a €3.5bn exposure to the troubled group.

Anglo has said it would pay bond holders €550m for €600m debt with new government backed bonds and would inject €150m into Quinn Insurance to resolve the solvency issue.

About €700m also owed to other banks by the group would remain on the books.

Senior executives of the bank met with the regulator for the second time yesterday evening to put their alternative proposals they believe offers the general insurance business and the entire group a life line.

Sean Quinn, who was forced to step down as chairman of the insurance group, would be retained as chairman of the overall group under the terms of Anglo’s plan.

In reality the Anglo proposals offer the best chance of survival to the stricken Quinn Group whose other interests include cement, a number of hotels including the well known Slieve Russell in Cavan and a range of other interests.

It is not clear however how the deal would ultimately work but analysts belive it offers the best chance of survival to Quinn Group and the best prospect of Anglo securing back some of the €2.8bn owed it by the Quinn family.