:: The country was gripped last week by the explosive three-part Quinn Country documentary on RTÉ. It detailed the rise and fall of Sean Quinn and his business empire which he tied to the fate of the doomed Anglo Irish Bank, before it and then the Irish economy tanked.
Unbeknownst to viewers, Birney has written a book that was kept under wraps until after the final episode aired.
:: The book is titled simply Quinn, and today we publish an exclusive extract. The following is an edited version of Chapter 8, entitled ‘F**k It, Let’s Get A Jet’.
The people of south Fermanagh were used to helicopters in the skies above them and could tell the difference between a Wessex and a Lynx – both used by the British military to ferry troops and supplies around the various border bases – just by the sound of their engines. By the summer of 2001, however, a distinctly different type of aircraft appeared out of the clouds over the border area. Seán Quinn had bought himself an Agusta A109E helicopter.
He’d already had a helipad built years earlier at the Slieve Russell Hotel. At the time, he may have been thinking it would be for those staying at the hotel. Now, however, he’d joined the growing ranks of Irish businessmen whose travel mode of choice was a twin-engined helicopter.
Quinn had paid over IR£2m for the Agusta, which he’d decked out in blue and added the serial number EI-SQG. With a range of more than 1,000 km, it could take him the length and breadth of Ireland and across the Irish Sea to England.
Seán Quinn was on the ground, in his office at the company headquarters, however, when news of what was initially thought to be a major air crash filtered through in September of the same year. He huddled with his executive colleagues around a television in the boardroom as the true scale of 9/11 began to dawn on the world. Almost 3,000 people lost their lives on a day that changed the world.
Like the rest of the country, Quinn was stunned. In the days and weeks that followed, he began to consider the potential cost to his business, particularly Quinn Direct, as, in the immediate aftermath, airlines and insurance companies were the worst hit. However, much to Quinn’s relief, within months the stock markets and economies around the world miraculously bounced back. Yet insurance costs remained high.
It was hard to explain to a Co Leitrim householder why 9/11 caused their home insurance to go through the roof but, basically, if they took out a policy with Quinn Direct, the company offset the risk of a huge claim by purchasing a reinsurance policy, which covers every house insurance policy it sells. The reinsurance company then has billions of dollars of risk from around the world and so it too mitigates its risk by purchasing what’s called ‘retrocession cover’, which is at the very top of the insurance tree. So, in reality, the policy bought through Quinn Direct is merely part of a global insurance chain, and when the claims for 9/11 mounted to more than $70 billion, the retrocessionary companies, worried about further terrorist attacks and the potential for further claims in a new, destabilised world economy, set their prices high, which caused a waterfall effect through the system right down to Quinn’s customers, who suddenly had to pay significantly more for their policies. And that not only saved Seán Quinn, it made him a fortune.
“9/11 saved Quinn,” said a very close colleague at the time, “it’s as simple as that.” On the day the planes hit the World Trade Centre, “Seán Quinn had already given HSBC bank a mandate to sell the company after the dotcom share debacle,” said the colleague. But when he realised that Quinn Direct was going to be an unexpected beneficiary of Osama Bin Laden’s holy war on America, Quinn was able to ride out the crisis – and indeed ultimately thrive from it.
Despite this, he continued to talk about stepping back from the company in some shape or form. He was now in his mid-fifties, after all. But the question remained: could he really ever relinquish control?
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While the group he owned had now grown to include insurance, glass, cement, tiles, hotels and pubs, Quinn was still looking for more. His ambition was insatiable. With huge profits now pouring in, particularly from cement and insurance, and low-cost finance available to him from banks that was agreed after little more than a phonecall, Quinn had the ability and the resources to go much bigger, much further.
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In March 2004 he took his helicopter to attend the annual Cheltenham horse-racing festival. The favourite to win the Gold Cup – the festival’s biggest race – was Best Mate, the horse seeking to complete a hat-trick of victories. Every year, thousands of Irish horse-racing fans make a pilgrimage to the racecourse an hour north-east of Bristol, the festival usually coinciding with St Patrick’s Day, which adds a distinct green colouring to the racing.
Quinn wasn’t the only Irish businessman to arrive in style in his helicopter. Also there was one of the richest men in Ireland, Dermot Desmond. He began his career in finance at Citibank before moving to PWC and, in 1981, at the age of 31, founding NCB Stockholders, which became the largest independent brokerage in Ireland before he sold it to the Ulster Bank in 1994 for IR£39m. (At the very time of the festival, Quinn was taking a 20pc share in NCB, supporting a management buyout in the deal set up by Conor Killeen.) Desmond was raised in Dublin and was very well connected. He’d been one of the businessmen who’d financially supported Taoiseach Charles Haughey, as revealed in the Moriarty Tribunal and reported in the Irish Independent, even going as far as paying for the refurbishment of his yacht, Celtic Mist.
Like Quinn, he was self-made, but the two men were polar opposites.
Quinn was the outsider who revelled in his status as a Border chieftain, while Desmond was a smooth, shrewd operator who had amassed his fortune through diverse investments.
At the festival the two very different businessmen got to know each other over their shared love of racing. But, of course, they were soon talking business and, in particular, about a radiator-and-plastics manufacturing company in which they both had a stake.
Barlo was established in the mid-1960s by Aiden Barlow and was floated on the Irish Stock Exchange, but in the early 2000s its share price was becalmed, valued at less than €50m. The company’s chief executive, Tony Mullins, went on an acquisition spree, buying a plastics firm in Slovakia and Athlone Extrusions, which manufactured polystyrene sheet and film. But his strategy failed to impress the markets and, by 2004, the company become the subject of intense speculation. Tony Mullins put together a management buyout (MBO), which priced the company at €70m, or 40 cent a share. For a bid to be accepted, it required the support of 80pc of the company’s shareholders. And Mullins didn’t have it.
During the early months of 2004, Desmond had been quietly buying up shares in Barlo and by the time of the races, he’d built up a 19pc stake, primarily through convincing investment house Gartmore to sell its entire holding in Barlo to him. Desmond’s stake had cost him €7m.
Through Quinn Direct, Quinn had also bought into Barlo, holding 2.4pc of the shares while continuing to buy more every day. So when Desmond and Quinn arrived at Cheltenham, they were enjoying the craic and laying down bets on the horses, but their minds were on Barlo.
Quinn wanted to mount a takeover of Barlo, but he needed Desmond’s shares. The two men jousted throughout the festival until the final evening. After Best Mate romped home in the Gold Cup, it was now or never for Quinn.
In a box in the stands, he met Desmond, who was holding out for as much as he could get on the shares which he’d bought for 42 cent each. They couldn’t agree on how much Quinn would pay him so the two businessmen decided that the only way to settle the final price was to toss a coin. Quinn won and agreed to pay Desmond 48 cent a share, a 15pc return, or a tidy €1m profit on his €7m investment.
At the end of Cheltenham, Quinn flew home high on adrenaline.
He now controlled 30pc of the company.
Within weeks, he had full control, blowing the MBO out of the water by paying shareholders eight cents more than Tony Mullins had offered.
In the end, he took over Barlo for €85m. One of Quinn’s senior executives says the Barlo deal marked the moment Seán Quinn ceased to be a Border businessman.
The following Monday morning, back in Cavan, Quinn told his colleagues a helicopter was no longer going to be enough. “F**k it,” he exclaimed, “let’s get a jet!” The company staff had flown commercial airlines when travelling abroad for business, but now Quinn wanted to have his own plane. A Dassault Falcon 2000EX private jet costing more than €16m was duly ordered up. Dermot Desmond just happened to have the same type of plane.
Clearly Barlo wasn’t the only thing Quinn had come back with from the races; hanging around Desmond for just a few days had given the quarryman a taste of how wealthy businessmen operated.
Considering Seán Quinn’s mindset at the time, one of his former colleagues said: “The problem with Seán was that he [began to] believe his own myth. He liked to be the man who plays cards for 50p but, in reality, he liked to be in those [high-flying] circles. He would have always been impressed by it whilst maintaining he wasn’t.” He wanted the trappings of success. For those around him, nothing would be the same again after Cheltenham 2004. His head had been turned, as the people of Fermanagh might be heard to say.
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The Quinn Group – particularly its executive team – were being stretched physically and mentally. But they believed in Quinn, and his voracious appetite for success was infectious.
One executive described the environment in Derrylin at the time: “Quinn was so highly driven and looked at things in an uncomplicated way. He was of the mindset: if you build it they will come. He always started with the answer and worked backwards.” The executive then added the interesting tag: “But, on the other hand, Seán thought he owned you.”
Still, while the company was growing, succeeding and profitable, the executive team around Quinn threw everything behind him, working around the clock to support him and ensure his every wish became a reality. He was the rainmaker, the guy out front who knew more than them, whose instinct had made him the success he was, and while the sun shone on Seán Quinn there was no reason to doubt his abilities.
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Quinn also found time for matters domestic, deciding to build a home that matched his new-found status among Ireland’s wealthy elite.
A month after the Cheltenham races, Quinn filed a planning application to demolish the family’s modest two-storey home at Greaghrahan outside Ballyconnell, where he and Patricia had raised their family, and replace it with a 15,000-square-feet, seven-bedroom, four-storey house with a swimming pool and leisure area. When completed, the house would overlook Lough Aghavoher and the Slieve Russell golf course.
The “leisure area” alone was twice the size of the average family home and there was parking for nine cars. But rather than criticise, locals were impressed and proud. After all, many of them had been able to purchase their own homes because of the wealth and employment he’d brought to the area.
Quinn himself knew that he could build a supersize house without causing any embarrassment.
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All this expansion meant that, in 2005, the Quinn Group was officially the most successful family-owned business in Ireland. It was more than 30 years since he’d started the company, but now Seán Quinn had created the most profitable private business on the island. His achievements were as staggering as the numbers that were making headlines on a very regular basis. All this had been achieved through following his instincts.
But he’d also reached this point through failing to listen to his advisers: to those who warned that he couldn’t maintain the growth and the diversity strategy that he’d adopted; those who said he should dilute the family’s shareholding; and those who were still worried that rather than learning lessons out of the dotcom failure, it had provided him with the belief that he could do whatever he wanted, without fear of the consequences. Rather than sell off parts of the business, Seán Quinn was determined to hold on to everything he’d built.
And that was about to take him down a rabbit hole from which he would never escape.
:: Quinn, by Trevor Birney, published by Merrion Press, out now, €20
