Talks began at 5pm last night with Anglo lobbying the regulator not to put the insurance company into administration until it had adequate opportunity to make its case for saving the group. Last week, provisional administrators were appointed by the High Court to Quinn Insurance.
Anglo has put forward a financial rescue package for the entire Quinn Group which owes it a total of €2.8 billion.
Anglo itself requires over €22bn from the state to stay afloat and will have to convince the regulator that it represents a credible rescue vehicle for the struggling Quinn Group.
Under the plan, the state-owned bank would pump €150 million into Quinn Insurance, while a further €550m would be paid to bondholders, bringing the total cost of the takeover to €700m.
If approved by the regulator, Anglo would end up being owed €3.5bn by the Quinn Group while Sean Quinn, the founder, would be retained as chairman.
Quinn has admitted that its insurance subsidiary is outside the regulator’s solvency demands but insists €150m would resolve that problem.
Quinn group chief executive Liam McCaffrey said yesterday it would be in the interests of all if the regulator delayed taking further action against the insurance arm of the business for the moment.
Quinn is prepared to talk to Anglo about the restructuring proposals and to anyone else in an effort to resolve the current threat hanging over the businesses.
The plan would release the insurance company from guarantees which caused the problem for the regulator in the first instance, because the company had assets on its books already pledged as security against loans it failed to disclose.
Quinn Insurance is profitable but the solvency issues, which arose some years ago, were not dealt with by the group.
Putting it into administration on Monday could undermine the future of the rest of the group and jeopardise thousands of jobs.
The group employs over 5,500 of which 2,800 are in the insurance operation.
Green finance spokesman Dan Boyle warned that the independence of the Financial Regulator must not be affected by the Quinn issue.
In what was seen as a shot across the bows to the Greens’ partners in Government, Mr Boyle said there could be “no equivocation” over the need to maintain the regulator’s full independence.
A cross-party delegation of border TDs, including Fianna Fáil representatives, met with Mathew Elderfield and the governor of the Central Bank, Patrick Honohan earlier this week.
While those TDs stressed that they respected the independence of Mr Elderfield’s office, and were merely seeking information on behalf of their constituents, there is concern in some quarters about the issue becoming political rather than being left to the regulator, administrators and the courts.
“It is clear that the appointment of Matthew Elderfield has been an excellent appointment and that he has set about this job by making difficult decisions that too often have been avoided in the past,” Mr Boyle said.