Liberty buys insurance unit of Quinn for just €1
Published 05/05/2011 | 05:00
US giant Liberty Mutual yesterday admitted it bought Quinn Insurance for €1, but insisted it had not gotten the Cavan insurer "on the cheap" since it came with net debts of €81m.
The comments came as Liberty bosses set out its stall for growing Quinn Insurance Limited (QIL) over the coming years, before buying out joint-venture partner Anglo Irish Bank.
The Liberty chiefs also insisted that its QIL takeover posed no threat to jobs in the border area, though Liberty is planning to bring in a new chief executive "from the Liberty family".
And the US insurer said while value had been lost on a "daily basis" since QIL went into administration a year ago, the estimated €600m claim on the Insurance Compensation Fund would not have been materially reduced by a swifter sale.
At the Dublin briefing, Liberty's Armagh-born chief executive Ted Kelly and president David Long faced sustained questioning on the terms of their deal to buy Quinn Insurance Limited.
The duo admitted that the €102m injection to QIL's capital was the "only cheque" Liberty was writing in connection with the deal, which was done for the nominal price of €1.
The €1 gets it a 51pc stake in one of Ireland's biggest insurance company's, which has just offloaded its most toxic claims so they can be funded by the Insurance Compensation Fund.
Liberty stressed the company it was buying with Anglo had debts of €792m and just €771m of assets -- a negative value of €81m. Anglo is putting in €98m on top of Liberty's €102m.
A growth plan will be devised by the new team which Liberty hopes to have installed by September when the deal gets regulatory approval.
Liberty plans to buy Anglo out in the future, Mr Long said, adding that the terms of that deal had "not been discussed". It also hinted that it might resume writing business in the UK market in the future, adding that QIL's UK business lost money in the past because it was "badly underwritten".