Quinn overseas firm hit by Anglo losses
Swedish-based company suffers €144m writedowns
Published 04/02/2010 | 05:00
Huge losses incurred by Sean Quinn's family on their stake in Anglo Irish Bank has even ended up damaging the performance of the Quinn firm which owns assets in Russia, Turkey, Ukraine and India.
The Irish Independent has seen the annual report for the Quinn investment vehicle, based in Sweden, which owns properties and construction projects throughout Russia, India and other countries.
Due to problems at Anglo Irish Bank, loans provided by this company -- Quinn Investments Sweden -- to a related company have become impaired.
The property investments in these markets were performing well, Quinn said yesterday, but loans had become impaired following problems with the Anglo investment.
"The property portfolio owned by the Quinn family is performing satisfactorily. However, the results for 2008 were impacted by once-off costs relating to the impairment of loans made by Quinn Investments Sweden to a related company which had suffered losses as a result of the family's investment in Anglo Irish Bank,'' said a statement provided by the Quinn Group.
The Swedish-based company took writedowns of €144m on investments in subsidiaries. The annual report shows that an after-tax loss of the same amount was reported.
An AGM of the Swedish company was held shortly before Christmas and the board approved "proposals'' concerning the losses, although these were not detailed.
The precise level of losses on the Quinn Anglo investments remain unknown, with the Quinn Group describing various newspaper accounts as "speculative''. However, the chief executive of the VHI, Jimmy Tolan, recently said the details of the losses should be put into the public domain.
He said the losses were "relevant" to both customers of and suppliers of services to Quinn Healthcare.
"Whatever the level of losses are, they should be in the public domain. I think they are relevant for people who buy their products. It is relevant for consumer-facing businesses," he commented.
Quinn Group for its part accused Mr Tolan of "scaremongering'' and said the losses arising from Anglo had been "clearly defined''.
The Quinn Group had since moved on from the issue and was planning two IPOs by 2015, according to a communication from founder Sean Quinn.
The annual report outlines the scale and variety of the Quinn assets in eastern Europe, Russia and India, with the Swedish-based company holding assets worth €555m. Russia is the largest contributor to this asset base with €369m of assets, while €61m of assets are held in Ukraine. The Russian assets are unpinned by debt of €311m, while the Ukraine operations have debt of €43.7m.
The Swedish company reports no significant slowdowns from tenants or reductions in rent levels.
The company has launched a series of ambitious plans for the Indian market, including a large 536-bedroom hotel in Hyderabad, the southern Indian city which has a population of four million people. The annual report discloses that this has been postponed.
The Quinn Group yesterday provided an update on its prospects in India. "Our Indian operations recently finished the construction of a 79,000 sq m office block which is being leased out to a variety of international tenants. Demand is still strong in India and economic recovery is well advanced there.
"The second project, a large Hotel in Hyderabad, has temporarily been put on hold due to the world economic decline and its effect on tourism.'