Thursday 30 March 2017

Sean Quinn faces losing all equity in firm he built

Laura Noonan and Emmet Oliver

THE restructuring of the Quinn Group could see founder Sean Quinn stripped of any equity or control of the conglomerate he spent decades building.

The news comes a week after bondholders and banks were offered equity in some of Quinn's key assets as part of a €1.27bn financial restructuring.

Sources last night stressed that any deal was not expected to be done until after Christmas. "Things are hotting up but there are a lot of moving parts, and lots of things are out of our control," said one source.

The key uncertainty is whether Anglo Irish Bank, which is owed €2.8bn by Quinn, is successful in its bid for the Quinn Insurance.

The current proposal asks bondholders to relinquish the €550m of guarantees they hold on Quinn Insurance assets so Anglo's bid can proceed.

"Anglo is the one driving this whole thing and it all hinges on whether they get insurance or not," said one source. Bids for Quinn Insurance are due tomorrow, but it could still be months before a successful bidder is named.

Anglo believes it can get some value from having the bondholder's grip on Quinn Insurance removed regardless of who ends up buying the insurer, but some sources said the prospects of this were "pretty remote".

Sources close to the negotiations also stressed that there were several other uncertainties in the plan to give lenders equity in a new company comprised of Quinn's manufacturing assets. It is understood even the release of the 2009 Quinn Insurance and Quinn Group accounts is held up pending the outcome of the negotiations.

The new debt package for Quinn Group is expected to bear a hugely increased margin that reflects the elevated cost of funding in credit markets. The recent IMF/EU package agreed for Ireland has not helped the perception of the Quinn Group, which is a major supplier to the Irish construction trade, said one source.

A "heads of terms'' agreement could be drawn up by the end of the year, although that is an ambitious target, sources said. How to "get rid of" Sean Quinn is a key concern of lenders, some of whom would like to see him completely removed from the group.

They say Quinn Manufacturing's equity could be entirely split between the various lenders, leaving nothing for the Quinn family, but there are concerns about removing him totally.

"Sean Quinn has huge support from the employees," said one source. "There'd be a concern that they could go on strike."

Mr Quinn has not been directly involved in negotiations with lenders, but has been represented by senior Quinn executives including Liam McCaffrey.

A spokesman for Quinn said discussions with lenders were "ongoing" but declined to comment further.

Quinn's lenders are also concerned about how the equity in Quinn Manufacturing would be divided and how much debt the newly created outfit would take on.

Irish Independent

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