Fearful future for Quinn workers as buyers circle
Four in 10 jobs at the insurance company will go before mid-2011
FORTY prospective buyers for Quinn Insurance will receive documents outlining details of the sale by the end of the month, sparking fears there may be more job losses in the wider Quinn Group on top of the 900 announced on Friday.
The interested parties come from Ireland, the UK, Europe and the US and includes ‘farmer’s insurer’ FBD and Allianz, the multinational that has its headquarters in Munich.
It has also emerged that the Quinn Insurance facility in Blanchardstown, Dublin, will be hardest hit in the package of voluntary redundancies that was announced by the joint adminstrators of the crisis-hit insurer.
There will be 301 redundancies at the west Dublin office, covering all areas and grades, with 65 expected in the first phase.
The other redundancies are: at the Cavan office, where 226 redundancies are expected, including 121 in the first phase; Enniskillen (179); Navan (109); Derrylin (27); Manchester (48); London (six) and O’Connell Street, Dublin (four).
The administrators said they would begin a consultation process with the Employee Representative Committee next Tuesday and expressed the hope that the redundancies would be voluntary. They want 350 redundancies by July as part of a ‘first phase’, with the balance over the following 12 months.
Staff will be offered severance terms of four weeks’ pay per year of service, in addition to their statutory entitlement, which in the Republic is capped at €600 per week.
It means that four out of every 10 jobs at Quinn Insurance will be gone by the middle of next year.
Staff across Quinn Insurance's nine bases in the UK and Ireland now have just two weeks to decide whether they will opt for a voluntary redundancy.
The decision by the wider Quinn Group to confirm — on the same day the redundancies were announced — that it will sell its insurance arm took the administrators, Michael McAteer and Paul McCann of Grant Thornton, by surprise.
“We'll certainly work with them but we only got the news an hour ago,” said Mr McAteer at the time.
Liam McCaffrey, chief executive of the Quinn Group, said that its board had considered a number of options but had now “reluctantly” settled on a sale.
He said: “In view of the funding required to meet the solvency requirements laid down by the Financial Regulator, the future of Quinn Insurance is probably best protected under new ownership”.
The group will work ”closely” with the administrators to see if a sale can be agreed in as short a time as possible, with a view to protecting the maximum number of jobs, Mr McCaffrey added.
Any sale will have to meet with the approval of the administrators and the Financial Regulator.
The administrators will now sift through 40 expressions of interest from parties who want to buy Quinn Insurance which have been received since their appointment by the High Court on March 30.
FBD Insurance, the secondlargest company in the Irish insurance market (excluding health), said it would consider purchasing the business.
“If such a move was seen to offer the opportunity of increased shareholder value, we would consider it,” a spokesman said. Allianz said the company was not “ruling in or ruling out” acquiring the Quinn business, with a spokesman adding that any potential purchase would depend on price.
But the sale of Quinn Insurance will raise the spectre of further job lossses in the Quinn Group, which owes banks and bondholders €1.2bn.
Quinn Insurance is to be sold debt-free, leaving the €1.2bn of debts behind for the remainder of the company to deal with.
The wider Quinn Group employs about 5,200 people.
Quinn Group must refinance its €1.2bn debt to a syndicate of bond-holders, while the Quinn family have debts of €2.8bn owed to Anglo Irish bank and secured on their shares in the group.
Minister for Agriculture, Fisheries and Food Brendan Smith — who is a TD for Cavan-Monaghan — said all efforts must focus on supporting those workers affected.
“There is no escaping the fact that this is a very bleak day for Quinn Insurance and its employees. I do not underestimate the major contribution of Quinn Insurance and the wider Quinn Group to this region.
“They have always been good employers and today is a big blow to many individuals and families,” the minister said. “Since the company went into provisional administration a month ago, I have consistently emphasised that everything must be done to protect the maximum number of jobs involved.”
Fine Gael leader Enda Kenny yesterday said the party’s cross-border forum would meet this week to respond to the job losses.
It will be attended by representatives from the Oireachtas and local authorities. Members of the Northern Ireland assembly have also been invited.
The job losses in Quinn are aimed at achieving savings of €30m annually and helping to restore the insurer to profitability.
Derek Smith, the newly elected chairman of Quinn Insurance's Employee Representation Committee, said staff were taken aback by the news that Quinn Insurance was to be sold and were unsure what it would mean in the future.
“There's great loyalty for Sean Quinn in here; people want him to stay involved,” said Mr Smith. “Staff were just getting their heads around the job losses and then we got this news. People don't know what to think.”