TALKS BETWEEN Quinn Group, Anglo Irish Bank and the group’s lenders over changes to its refinancing will continue next week as they discuss how the group’s valuable overseas divisions could be used to reduce the debts of the manufacturing businesses.

Discussions among the parties are said to be constructive with the group and its backers still supportive of the main parts of the restructuring deal announced last April to refinance its debts.

A fall in expected earnings for the group over recent months due to difficult trading conditions has forced the lenders and the group to revisit the terms of the restructuring ahead of a mid-October deadline for an agreement.

Anglo, which is owed €2.9 billion by the Quinn family, and the lenders to the group took ownership of the group in a restructuring of its €1.28 billion loans.

Some €588 million of the debt moved from the manufacturing businesses to the shareholders.

The fall-off in anticipated earnings is likely to lead to more of the debt on the manufacturing businesses being moved to the shareholders to ensure they can trade viably and service debt amounting to about seven times’ earnings.

Among the concessions that may be given to the banks and bondholders are changes to the coupons on the loans and the possible sale of some of the group’s overseas operations with the aim of protecting Irish jobs in any further restructuring.

Quinn Group has a valuable glass manufacturing plan in Elton near Manchester and a plastics plant in Mainz in Germany.

The Minister for Finance, as Anglo’s owner, must be consulted on changes to the restructuring.

Anglo said this week that the restructuring aimed to allow the manufacturing businesses to “operate by servicing the smaller debt burden of €682 million only and to be protected from the risk of the excessive debt burden that Mr Quinn had accumulated”.