Anglo will not sell off Quinn assets 'for at least five years'
Published 15/04/2011 | 05:00
ANGLO Irish Bank is planning to wait at least five years before attempting to sell off the core elements of Sean Quinn's manufacturing empire.
The news comes after Anglo dramatically seized control of Mr Quinn's cement, radiator and glass business yesterday morning.
In a statement, the Quinn Group stressed that all 2,600 jobs across Quinn Manufacturing would be protected under the new structure.
Anglo is prepared to invest a significant amount of cash in the manufacturing jobs and may create additional jobs over time, it is understood.
The change of control came after Anglo appointed KPMG insolvency specialist Kieran Wallace as the "share receiver" over Quinn Manufacturing.
The effective ownership of the new manufacturing company will be split between Anglo (75pc) and other Quinn Group lenders (25pc).
The new company will have about €760m of debt and pre-tax earnings of about €100m. Major sales, either through a flotation or trade sale, won't be considered for five years.
"There's an agreement . . . that the glass company will not be sold off for five years," Finance Minister Michael Noonan confirmed yesterday.
"Other elements of the company cannot be sold unless certain prices are achieved."
Mr Noonan said this meant there was now "potential to build up value in these companies".
"That's good for the Irish taxpayer because when (the stake) . . . is sold, that will help pay off the debts," he added.
Anglo is taking control of the manufacturing group as part of a bid to secure repayment of some €2.88bn owed by Quinn Group founder Sean Quinn.
Anglo will also have to share any proceeds it recovers from the Quinn Group with the group's own lenders. The group's lenders loaned money to the business as normal corporate business. They are owed €1.3bn in total and include hedge funds and international banks.
Under a deal worked out with Anglo Irish Bank, only €760m of that figure will be owned by the manufacturing business.
The rest of the €1.3bn is being shifted over to the other parts of Quinn Group -- that figure of €500m or so is still owned but will be paid back out of asset disposals.
The deal is aimed at making the remaining manufacturing business as streamlined and unburdened as possible -- which the new owners hope will ultimately help them get the maximum return on the business down the line. The manufacturing group includes everything from cement and gravel to radiator makers, and is considered the biggest prize among all of Sean Quinn's assets.
The Quinn Group might be associated in most people's minds with the border counties of Cavan and Fermanagh but the manufacturing business is extraordinarily far flung -- there are radiator and plastic-making plants everywhere from the UK and Germany to Slovakia. It's the reason the case has attracted huge attention from so called 'vulture funds' in New York and London which buy into bad loans in an effort to gain a share of a business.
Anglo Irish Bank is the main player in the move against Quinn. "It is in the interest of the bank that the businesses in the group are healthy, well invested, have the capacity to develop profits," Anglo boss Mike Aynsley said.
"This in turn secures jobs. We have taken an approach which protects these businesses, putting them on a sound financial footing. They will run by the directors on a 'business as usual' basis. This, ultimately, paves the way for maximising the repayment of debt to the taxpayer over time."