QUINN INSURANCE:A JOINT venture between US insurance giant, Liberty Mutual, and Anglo Irish Bank is set to take over Quinn Group's general insurance business.
Once the deal goes through, it will do away with guarantees given to bondholders owed €464 million by the company, who will instead get €80 million in cash and €125 million from the sale of hotels and other properties.
Quinn Insurance Ltd’s administrators, Michael McAteer and Paul McCann of Grant Thornton, who took control of the business last year, confirmed yesterday that the venture between the State-owned bank and the multinational has preferred status.
This means that no other offer will now be considered for the general insurance business, and the Liberty Mutual-Anglo bid will go ahead once it gets approval from the relevant authorities. The deal does not include the health insurance business.
The administrators said the new venture would not affect existing customer policies and will continue to operate existing product lines in Ireland and Britain.
“Current customers are unaffected by today’s announcement and in the interim Quinn Insurance Ltd will continue to offer quotes and renewals as normal,” they said.
The High Court appointed the administrators to the company a year ago after the Financial Regulator, Matthew Elderfield, found it had breached solvency rules by guaranteeing debts owed by other businesses in the Quinn Group.
None of the Irish employees will lose their jobs as a result. All 1,570 staff in the Republic and the North will transfer to the new operation under transfer of undertakings legislation.
Offices in Ireland will be centralised in Blanchardstown, Cavan and Dublin. Its Navan office will close and workers there will relocate to either Cavan or Blanchardstown, depending on their role.
In Britain, 30 staff in Manchester will be offered redundancy on the same terms and conditions as those offered to the 800 employees let go last year under a voluntary programme.
Liberty Mutual will be responsible for the day-to-day running of the business. Anglo Irish Bank will not be involved in this but is taking a majority stake as part of its effort to recoup a €2.88 billion debt from the overall Quinn Group.
Talks on finalising the deal are expected to take four to six weeks. Once they are concluded, the transaction will take 12 to 14 weeks to complete. The administrators’ statement said they would not reveal any further details until that it complete.
It is understood that bondholders owed €464 million by the insurance company on foot guarantees will receive €80 million in cash and €125 million from the sale of property in full settlement.
The deal is part of the overall restructuring of the group that will end the involvement of founder Seán Quinn and his family in the business, which also has interests in manufacturing, cement production and energy.
Liberty Mutual is a Fortune 500 company and the fifth-largest insurer in the US. At the end of 2009, it had $112.3 billion in assets, $95.4 billion in liabilities and $33.2 billion in revenues.
