Anglo set to continue Quinn investment talks

State-owned Anglo Irish Bank was today expected to continue negotiations with the Financial Regulator to take over a beleaguered insurance firm at the heart of the Quinn Group.

Quinn Insurance, owned by tycoon Sean Quinn, once the country’s richest man, is in administration after the watchdog raised concerns over its ability to pay an influx of claims.

Nationalised Anglo, which will ultimately be refinanced by the taxpayer to the tune of €22bn, moved to strike a deal ahead of a High Court hearing on Monday.

It centres on the bank’s desire to secure debts of €2.8bn owed by the Quinn family after a complex share deal turned sour.

Two other key areas are the regulator’s aim to protect the insurer’s one million customers and the need to run the business as a going concern.

Regulator Matthew Elderfield has this week been reviewing the administration move, Anglo’s bold bid and a revised business plan from Quinn.

The group said it can put the insurer on 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 the regulator dramatically moved to wrest control last week.

Liam McCaffrey, Quinn Group chief executive, revealed the insurance wing needs up to €150m to meet the regulator’s requirements on insurance solvency.

But he denied allegations it was facing a €700m 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 €800m cash and the Quinn Group, which generated cash profits of about €47m in the first three months of this year, holds €70m in reserve.

If a deal is acceptable, it is likely Monday’s High Court case on permanent administration will be adjourned.

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 €2.8bn from the family while the group owes €1.2bn 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 has claimed they were not included in quarterly solvency reports.