Quinn Insurance takeover talks continue

Officials from Anglo have tabled a potential rescue package to the regulator which would see the state-owned bank effectively take control of Quinn Insurance, owned by tycoon Sean Quinn.

While the lender had been hopeful of striking a deal before the court date, a spokeswoman for the Financial Regulator said lawyers were preparing for a full hearing.

It is understood that even if the firm is placed into full administration talks could still continue between the parties, with the regulator Matthew Elderfield remaining open to suggestions.

Two of the insurance giant’s flagship divisions, Quinn Healthcare and Quinn Direct, are in provisional administration after Mr Elderfield raised concerns over its ability to pay claims.

The proposals from nationalised Anglo – which will ultimately be refinanced by the Irish taxpayer to the tune of €22bn reflect 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 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.

As well as Anglo’s bid, Mr Elderfield was also reviewing the administration move and a revised business plan from Quinn.

The group claims it can put the insurer on a solid 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.

Agriculture Minister Brendan Smith, whose Fianna Fail constituency office is in Cavan – where the Quinn Group is the town’s largest employer – said there was a huge public interest in protecting the firm.

“Naturally we want to see the company prosper and the company very, very importantly to be in a position to meet its regulatory requirements in order to repay its debts to the state bank,” he told RTE radio.

“The objective of the discussions is to meet everyone’s requirements – that’s the taxpayers and the employees, and to ensure that the requirements of the regulator are met as well.”

But Fine Gael deputy finance spokesman Kieran O’Donnell blasted Mr Lenihan for failing to provide enough information on the issue.

“We need proper disclosures – the Minister effectively controls Anglo Irish Bank on behalf of the Irish taxpayer,” he said.

“Anglo is a potentially insolvent bank. Anglo appears to have no expertise in the insurance area and I suppose we’re concerned not only about sustainable jobs for the people working in the Quinn Group and Quinn Insurance but also about protecting the interests of taxpayers and the policyholders of the Quinn Group itself.”

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 47 million euro (£41 million) in the first three months of this year, holds €70m in reserve.

But Government officials have suggested it could founder if Quinn does not agree to management changes at the very top.

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 claimed they were not included in quarterly solvency reports.