A FORENSIC review of internal financial results and guarantees within the Quinn Group carried out for bondholders and lenders owed almost €1.3 billion by the group is well advanced, according to sources close to the business.
The review was requested by the group’s creditors last October to get a better understanding of the relationship between Anglo Irish Bank and the group.
Accountancy firm Ernst Young was appointed just before Christmas to carry out the review after initial reluctance from the group to provide the lenders with additional financial information.
The Quinn family owes €2.8 billion to Anglo, primarily due on loans provided to cover losses on the 28 per cent investment by businessman Seán Quinn in the bank.
Anglo ranks – in terms of its security – behind the lenders to the group which are owed €698 million and bondholders who are due €586 million.
A spokesman for the group had no comment to make.
It is understood that Ernst Young has made substantial progress on the review, which was requested as part of a refinancing of the €1.28 billion of debt which fell due last October.
Anglo and US insurer Liberty Mutual have submitted a joint bid for Quinn Insurance, which had historically been the most profitable part of the Quinn Group.
The motivation of the bank was to secure the repayment of the family’s €2.8 billion in loans to Anglo.
A preferred bidder for the insurer, which is in administration, is expected to be named in the coming weeks.
The company was placed in administration last year on a court application by the Financial Regulator which expressed concerns about its solvency after it emerged that the insurer had guaranteed the debts of the Quinn Group.
Ernst Young is assessing the extent of internal guarantees provided by subsidiary companies within the group.
The restructuring of the group’s debts has been delayed and is unlikely to be completed until there is clarity around the sale of Quinn Insurance and the completion of the forensic review.
The bondholders and lenders have sought a substantially reduced role for Mr Quinn in the group he founded. The group has said that Mr Quinn is crucial to the future profitability of the business.
Creditors have shown a reluctance to Mr Quinn taking the role of chairman at a restructured manufacturing group. Instead, the group has proposed the role of “founder” or a similar title which may be acceptable to the lenders.
