No role for Sean Quinn in deal to save Quinn Group
Sean Quinn, once Ireland's richest man, will no longer have any role in the Quinn Group which he created and made his fortune from, it has been revealed.
Nationalised Anglo-Irish Bank, which the tycoon invested and lost heavily in, has secured a deal for the businessman's holdings to be transferred to a receiver.
All 2,600 manufacturing jobs, including 1,000 in Ireland, have been saved.
The deal to transfer shares to Kieran Wallace, of accountancy firm KPMG, was struck after Mr Quinn failed to repay €2.8bn in loans built up through borrowings used to fund massive and complex share investments in Anglo.
All parts of the Quinn manufacturing group, which is involved in glass, construction, insulation materials, packaging, plastics and radiators in a number of countries, have also been protected for five years.
A company spokesman described it as good news for workers and said it would help give the businesses some "breathing space".
Michael Noonan, Finance Minister, said he welcomed the deal agreed by Anglo - the bank being funded to the tune of about €30bn by Irish taxpayers and being wound down.
"I welcome the debt restructuring plan which has been agreed in principle between Anglo Irish Bank and the group's lenders," the minister said.
"This structure will enable the good and strong businesses to continue to trade and grow. It is particularly important that there will be no impact on employment, on trade creditors or on day-to-day operations of the Quinn Group."
Some €500m of debts in the manufacturing business have been struck out.
In a separate development for the former cash cow of the Quinn Group, Quinn Insurance, a preferred bidder has been selected for the business - in administration for exactly one year.
Liberty Mutual, the fifth largest insurer in the US, has tabled an offer.
Mr Noonan said he was constrained in what he could say as the deal has yet to be formally sanctioned by the Central Bank in Dublin.
But he said: "I welcome the positives of the proposed agreement in that almost all 1,500 jobs in Quinn Insurance will be retained."
Those positions are separate from the manufacturing business.
Mr Quinn's downfall can be traced to what can best be described as a bet on the stock market value of Anglo-Irish Bank shares.
The tycoon, who built his empire on the back of a borrowed £100 and a small quarry on family farmland, used a hidden stock trading technique known as Contracts for Difference.
Investing huge sums, his stake in the now-defunct bank, the most aggressive lender for Celtic Tiger developers and speculators, grew to somewhere around the 20pc mark.
But the trades were a gamble.
Mr Quinn was using the complex contracts on a buy-now, pay-later basis up to 2008 - no-one including regulators or bank bosses had to be notified about his heavy trading and he was set to gain if the share price went up.
But the opposite happened, with Anglo eventually going bust, and the shares were ultimately rendered worthless when the State took control.
Mr Quinn was estimated to be worth about €5bn by Forbes magazine in the 2007 rich list.
Shares in the group held by other members of the Quinn family also transfer to the receiver.
Quinn chairman Pat O'Neill paid tribute to Mr Quinn and said he had "deservedly earned the respect and admiration of people all over Ireland for the work done in starting and building up the Quinn Group businesses to the level they have reached today".
"Sadly, in more recent years a number of well-publicised events have left the manufacturing group with substantial borrowings which, quite simply, the group could not service.
"If these debts were not restructured, the businesses could not survive in their present form."
Mr O'Neill said the deal should give the group the necessary financial stability to sustain business.
"We do not anticipate job losses from or related to this restructuring. On the contrary it will help to protect jobs. There are no plans whatever to break up the manufacturing businesses," he said.