Quinn could lose home as Anglo seizes empire
Most of firm's jobs safe as tycoon faces bankruptcy threat
Published 15/04/2011 | 05:00
CAVAN tycoon Sean Quinn may face the prospect of losing his palatial home after Anglo Irish Bank dramatically swooped on his most prized assets.
The embattled bank has taken control of the entrepreneur's Quinn Group company, which spans hotels, manufacturing and property assets.
The action will not absolve Mr Quinn of his €2.88bn debt to Anglo unless the bank is ultimately able to sell its stake in the companies for more than the tycoon owes.
This means Anglo may also go after other assets owned by Mr Quinn, including his 50pc stake in the family home he co-owns with his wife, Patricia.
A decision has not yet been taken and Mr Quinn may also be able to contest any action against his remaining assets.
Anglo had been building towards yesterday's move against Mr Quinn for several months but only informed the entrepreneur of its intentions "very recently".
Mr Quinn met Anglo chief executive Mike Aynsley, Anglo chairman Alan Dukes and Anglo executive Richard Woodhouse in Dublin yesterday.
The meeting was described as "relatively tense" as the Anglo executives explained their strategy and Mr Quinn protested his ability to repay the debt over time. The Quinn family was last night considering whether there are any legal avenues for it to contest Anglo's move.
A spokesman for the family said they had "no comment" to make on a series of detailed queries about the family's position. Sean Quinn and his wife Patricia's house could now be at risk if they both gave personal guarantees or entered into personal loan arrangements, legal sources said last night.
Yesterday's debt deal ensures the vast majority of the 4,200 jobs in the manufacturing and insurance wings are safe for at least five years.
But it leaves the former billionaire powerless in the multinational business he founded, and he now faces the threat of bankruptcy if Anglo issues demands on all debts.
Finance Minister Michael Noonan said protecting the Quinn Group companies was good news for workers.
"From an employment point of view it's a very good news story," he said.
"From the Quinn family point of view. . . Sean Quinn himself made an enormous contribution to employment in the border counties and from a personal level one would have to feel very sorry for him."
In a move separate from the Anglo action, Quinn Insurance -- the cash-cow of the group which employs about 1,000 people -- looks set to be sold to the fifth-largest insurer in the US, Liberty Mutual.
Mr Quinn has been forced into corporate exile -- the ultimate price to pay for a complex and secret share deal which left him holding a worthless 15pc of now-nationalised Anglo.
The Fermanagh tycoon, along with relatives, owes the bank €2.88bn and the business group owes €1.2bn.
Kieran Wallace, of accountancy firm KPMG, will hold the family's shareholding as manufacturing businesses are given "breathing space" to rebuild over the next five years.
Anglo chief executive Mike Aynsley suggested Mr Quinn had to be removed from the group or the bank risked allowing him to "milk" the business for funds to repay debts.
"We actually saw (it) as quite a risk continuing to milk or dividend these companies heavily in an effort to pay back the Quinn family debt," Mr Aynsley said.
The bank boss accepted that some of Mr Quinn's debts will never be recovered.
Anglo, refinanced with about €30bn of taxpayers' money, effectively controls the Quinn Group now.
Under the deal, the €500m debt on the books of Quinn's manufacturing firms will be wiped out.
These firms, involved in the manufacture of glass, insulation, packaging, plastics and radiators, are based across Ireland, the UK and Europe.
Lenders to the group, which includes Irish and international finance houses, said the deal would allow growth as they attempted to recoup hundreds of millions.