Insurance blamed for Quinn losses
Published 27/05/2011 | 10:19
The Quinn Group suffered an operating loss of €888m in 2009 with the insurance division blamed for the bulk of the losses, it was revealed today.
The aggressive insurer founded by tycoon Sean Quinn and currently in administration lost €644m during the year.
The division is being sold to US insurance giant Liberty Mutual and nationalised Anglo-Irish Bank in a deal that could force Irish consumers to cover as much as 85pc of losses.
Turnover at the Quinn Group in 2009 - the last year the business was fully under Mr Quinn's control - amounted to €1.6bn, down from the €2.2bn the previous year when an operating profit of €239m was recorded.
Paul O'Brien, Quinn Group chief executive, branded the losses hugely disappointing but predicted "robust" earnings for 2010.
"Following the appointment of administrators to the QIL (Quinn Insurance) business in March 2010, the insurance business is no longer part of our continuing operations.
"I would like to wish the new owners of QIL every success in their efforts to restore the business to full strength and thereby protect the jobs in that business."
The Quinn Group said its manufacturing operations remain profitable.
Mr Quinn and his family were stripped of their entire business empire last month.
It was the final act in a series of punishing initiatives by Anglo and the State to try to recoup about €3bn losses the entrepreneur built up buying a secret 25pc share in the bank.
Mr Quinn has lost control of the insurance wing - in administration for 14 months since regulators identified a huge hole in its finances - his hotel, pub and property division, cement production and other manufacturing interests.
The Government was also under pressure to retain as many jobs in the group as possible as Quinn's heartland is the unemployment blackspot around the Irish border. The Quinn jobs are estimated to be worth €100m to the local economy.
Mr O'Brien said the group's future now lies in its manufacturing businesses, involving container glass, construction products, plastics and packaging and radiators across a number of jurisdictions.
"The financial restructuring of the Group announced in April 2011 will give QGL stability and sustainability by permanently removing over €500m of debt obligations from the manufacturing businesses," Mr O'Brien said.
"Additionally, the fact that the group's borrowings have been secured for a five- year term, which is ahead of current industry norms, provides stability and certainty for our customers and suppliers."
Mr Quinn had drawn up a plan to take the insurance wing back from administrators but the National Treasury Management Agency rejected it.
At the height of his wealth, Forbes listed Mr Quinn as the 164th richest in the world and valued his fortune at close to $6bn.