Fog surrounds Quinn talks, but €2.8bn still outstanding
The €2.8bn owed to Anglo Irish Bank by Sean Quinn and family members is the largest single exposure in the Irish banking system and as the year draws to an end, the debt remains outstanding, despite tortuous restructuring talks at Quinn Group, a bidding race for Quinn Insurance and a "firm commitment'' from the Quinn family to repaying it.
There are now three transactions under way to make it possible for this money to be repaid.
There is a lot of fog surrounding each one, but there is no evidence yet that any of these initiatives are going to make it possible for the vast majority of the Quinn debt to be repaid.
The bid for Quinn Insurance from Anglo Irish (partnering with Liberty Mutual) is going to involve Anglo sinking up to €600m of additional money into the insurance company.
This is to meet regulatory conditions, but it is hard to see what return will be achieved on this money.
It upfront increases the exposure of Anglo (believed to be a bank in wind-down) to Quinn companies and any debt paydown via ownership of Quinn Insurance is likely to be extraordinarily long term and uncertain.
Meanwhile the Quinn Group debt talks are about restructuring €1.2bn of existing debts held by that company.
The talks are not about reducing the total level of indebtedness and deleveraging the company overall.
Whatever the final formula agreed, it will involve a higher cost of credit being paid by a company suffering from lower earnings in a recession mired economy -- hardly fertile ground for extracting value to offset against the €2.8bn of Quinn debts.
The third route, asset sales by the Quinns themselves are possible too, but the returns on these sales will only reduce the €2.8bn at the margins.
While there has been due diligence aplenty, exotic sales memorandums, meetings in Anglo, meetings in the regulator and calls from the government for Quinn to repay all liabilities, it is still hard to see how the bulk of the money will be repaid as a result of any of these deals.