A PROPOSAL to pay the holders of some €1.3 billion of Quinn Group debt a cash payment of up to €200 million, in lieu of guarantees over the assets of subsidiary companies of Quinn Insurance, was one of a series of recommendations put forward by the Quinn family in its discussions with Anglo Irish Bank on a possible joint takeover of the insurer.

The details of the Quinn family’s proposals for its proposed takeover of the company have emerged as the sale of Quinn Insurance reaches its final stages. The agreed sale of Quinn Insurance will be announced in the next two to four weeks.

Earlier this week the administrators of Quinn Insurance, Michael McAteer and Paul McCann, informed staff that there was no “Quinn proposal” or “Anglo Quinn” proposal for the company. It is believed that a deal between Anglo and US insurance firm Liberty Mutual, or up to three other insurance companies including Zurich, Allianz and Travelers, will be announced imminently.

However, representatives of the Quinn family have said that a Quinn-backed deal is still possible, arguing that it will represent the best value for taxpayers as it will allow Seán Quinn to repay his €2.8 billion debt to Anglo.

Mr Quinn and his family are represented by BDO Simpson Xavier in negotiations with the bank.

Among the proposals within the Quinn plan submitted to Anglo are that the family would purchase Quinn Insurance from the administrators for a nominal sum of €1, with Anglo investing up to €650 million so that the company meets solvency requirements.

An independent board of directors, which would not include any member of the Quinn family, would be appointed and would report to a trust. The company would be floated or sold off in seven years.

The Quinn family have also proposed to pay the holders of €1.2 billion of debt relating to the Quinn Group up to 10 per cent of the value of the debt in cash, in exchange for the debt holders relinquishing their rights over the assets of subsidiary companies of Quinn Insurance.

Some €1.3 billion of debt – about €700 million of which is held by a syndicate of banks, and the remainder by bondholders – has been up for refinancing since last year. The refinancing has been complicated because some of this debt has been resold at a discount, while the protracted sale of Quinn Insurance has also delayed any refinancing deal.

It is believed that the €100- €200 million payment to the bondholders would be part of the estimated €500-€600 million sum Anglo would need to invest in any takeover of Quinn Insurance in order for the company to meet its solvency requirements.