Lets Talk About Quinn

noodler

I am having trouble with some of the figures being thrown around here, specifically with relation to the Quinn Group's dealings with Anglo.

Mr Quinn recently said the Group lost €3bn or thereabouts on Anglo shares. They now owe Anglo €2.8bn.

My question is are these two figures related? I mean did they too (like the Golden Circle after them) purchase shares in the bank using Anglo money?

In today's times (Cover page) the €2.8bn owed to Anglo is attributed to "losses on share investments of about €3bn outside the group, most of which were incurred on Anglo".

I mean, was the money for the Anglo shares not paid at the time? or is it standard practice to 'owe' money for shares purchased?

noodler

Ah actually, Simon Carswell infers that this means Anglo lent the Quinn Group the money to cover the losses which nationalisation had on their shares.

noodler

I wonder if the lack of activity on this thread means that the answer to my initial question was obvious to everyone else from the outset or that no else cared!

Hasschu

I expect what happened was that Quinn negotiated a loan of E3B. with Anglo. In the course of the negotiations it came to light that if Anglo issued E3B. worth of shares they would indeed be able to accommodate Quinn. Quinn god bless his big Irish heart agreed. It was a win, win agreement Anglo increases its assets and Quinn improves its liquidity now backed by the value of the shares of a well respected and well regulated Irish Bank. Irish mythology is rich and deep and we are all steeped in it. I feel sorry for Quinn being taken in by the Dublin sharpsters.

BESman

I am having trouble with some of the figures being thrown around here, specifically with relation to the Quinn Group's dealings with Anglo.

The very simple answer to your question is yes, Anglo loaned Mr Quinn most of the money in order to buy shares in the bank. This is effectively (in a kind of indirect way) an example of a company buying its own shares to improve its asset position. Which, as you can imagine, is bad. Bad Anglo, bad. This is part of the overall investigation into the practices at Anglo.

I've summarised the more complex background below if you have an hour to spare...

Quinn has "equity losses" of around €3 billion outside of the Quinn Group. This means Sean Quinn more or less gambled his money on shares etc and as you can see he was very bad at this. Most of these losses were incurred through a very dodgey investment procedure known as "contracts for difference" whereby investors bet on the future price of shares in a company. So clever Mr Quinn decided to employ this technique with Anglo. The problem with contracts of difference is that when the share price falls (as it did with Anglo) the investor must hand over more money to the broker in order to maintain his stake in the company. Hence the astronomical losses Quinn incurred. And Anglo funded most of this.

After the sh1t hit the fan with Anglo and the share price plummeted, the famous "golden circle" were offered loans by Anglo to buy a proportion of Quinn's stake as he could no longer shoulder the burden of the investments. This allowed Quinn to convert his 25% shareholding in Anglo through contracts of difference into a 15% ordinary shareholding as the golden circle took 10% off his hands.

I wonder if the lack of activity on this thread means that the answer to my initial question was obvious to everyone else from the outset or that no else cared!

To answer your other question, I don't think the answer was that obvious, I think the majority of people on this forum just didn't care because:

a) A lot are probably economics research students who are still in college and are too busy carrying out ground breaking research on a dataset on Stata that no one has done before (like the relationship between birth weight and educational attainment, we know how important that link is) and as such don't take much interest in the real world

b) A lot are probably economics assistant lecturers who are still in college and are too busy carrying out ground breaking research on a dataset on Stata that no one has done before (like the relationship between birth weight and educational attainment, we know how important that link is) and as such don't take much interest in the real world and are also too busy getting a semi over Phillip Lane

c) A lot are probably economics lecturers who are still in college and are too busy carrying out ground breaking research on a dataset on Stata that no one has done before (like the relationship between birth weight and educational attainment, we know how important that link is) and as such don't take much interest in the real world and probably never held a single noteworthy position outside of academia to actually understand how financial institutions and real economics work (or in this case, don't work)

Am I ranting?

noodler

In their defence, I am only interested because it is semi-work related.

I am reasonably familiar with the other points of the story but thanks for your contracts of difference explanation - that was useful.

nesf

noodler wrote: »

In their defence, I am only interested because it is semi-work related.

It's just too murky tbh. It's really hard to say what exactly is going on with the Quinn group since so much of it is hidden. Just look at the uncertainty over how much money Quinn Insurance has etc.

BESman

nesf wrote: »

It's just too murky tbh. It's really hard to say what exactly is going on with the Quinn group since so much of it is hidden. Just look at the uncertainty over how much money Quinn Insurance has etc.

There are figures going around that they make €1 million profit.... a day. Murky is the understatement of the year.

Time Magazine

BESman wrote: »

To answer your other question, I don't think the answer was that obvious, I think the majority of people on this forum just didn't care because:

a) I'm being a bit of a dick

b) I'm being a bit of a dick

c) I'm being a bit of a dick

Am I ranting?

No, you're not ranting, but you are being a bit of a dick. I have no interest in the birth-weight of babies, but I'm pretty sure I could say nasty things about your research if I wanted to. Play nice, please.

BESman

Time Magazine wrote: »

No, you're not ranting, but you are being a bit of a dick. I have no interest in the birth-weight of babies, but I'm pretty sure I could say nasty things about your research if I wanted to. Play nice, please.

My intention was to be a bit of a dick. I see I have succeeded.

Time Magazine

BESman wrote: »

My intention was to be a bit of a dick. I see I have succeeded.

Sigh, banned.

thebman

nesf wrote: »

It's just too murky tbh. It's really hard to say what exactly is going on with the Quinn group since so much of it is hidden. Just look at the uncertainty over how much money Quinn Insurance has etc.

This what your asking is for people to speculate.

On a forum in science, people are more likely to reply on knowns than gossip.

noodler

thebman wrote: »

This what your asking is for people to speculate.

On a forum in science, people are more likely to reply on knowns than gossip.

?