Anglo to put €700m into Quinn

markpb · 09-04-2010 09:08AM

Deleted User wrote: »

Nobody saved SR Technics, nor did anyone save waterford glass etc etc etc. to hell with your quinn jobs, the high cost of insurance is a big part of why Ireland lost its competitiveness :mad:

Wow but that's childish. Whatever about the cause of the situation, what do you have against those people having jobs? Are you really that bitter!

What happened when QDI entered the insurance market? People (mostly young people) who couldn't previously afford insurance could get it. Other insurers reduced their prices. Two years ago when I was tendering for insurance for our apartment block, QDI was the cheapest by over €10,000. How on earth can you blame Quinn for the high cost of insurance?

If it makes you feel better, Axa were interviewed a few days ago by one of the leading papers here (can't find a link, sorry). They said they had never been happy with QDI in the market because their aggressive investment strategy meant that QDI were charging lower than industry average premia and that Irish insurance customers would soon have to leave the alice in wonderland insurance market and pay proper premia.

Bugnug · 09-04-2010 09:20AM

oppenheimer1 wrote: »

Another twist in the tale of the Quinn group saga.

Interesting times. I wonder whats really going on there. Effectively another nationalised company, one wonders where it will end.

I am no lawyer and I am sure there are loop holes and ways out of paying back money that is owed by the super wealthy, but why are paople like Sean Quinn not forced to pay what they owe out of their personal wealth? The Quinn family openly Anglo €2.8bn. They have obviously been doing a bad job of running the business, making personal guarantees to foreign creditors. Can the govermnent not fast track some legislation so that the likes of Quinn, Dunne, Fitzpatrick, Drumm et al have to pay back the money by whatever means necessary? They did it with the CAB legislation why can they not do the same to these criminals? In fact could CAB legislation not be applied here?

There is something very sinister going on here with this golden circle and the real truth is yet to come out and I get the very real impression that Sean Quinn is hiding behind his employees and getting them to fight his battle, he is a very cunning guy. The anger of the Quinn emplyees is totally misdirected. Its Quinn and his greedy practices that have put his company in this mess not the regulator. I feel another heafty sum being added to the already astronomical tax bill for you and me.

And dont get me started on Bertie Aherne "the teflon Taoiseach" indeed.

markpb · 09-04-2010 09:25AM

Bugnug wrote: »

Why are paople like Sean Quinn not forced to pay what they owe out of their personal wealth? The Quinn family openly Anglo €2.8bn. They have obviously been doing a bad job of running the business, making personal guarantees to foreign creditors.

I don't disagree that white collar crime is rampant and unpunished here but you're missing the point with those two lines above. Businessmen give personal guarantees to investors *all the time*. It's a better than average way of stopping them taking out loans (or leases) and then collapsing the company when going gets tough. Under normal business law, they could walk away without having to pay anything. With a personal guarantee, they are still liable even if the company is gone. There's nothing wrong with it, it's not a sign of anything untoward.

The other thing is that business borrow huge amounts of money all the time. They borrow it for cashflow (in a rolling credit facility), for expansion, for capital expenditure. There's nothing wrong with that. The problem only arises when they can't make the repayments or they breach another covenant. I've seen nothing in the press to indicate that the Quinn Group has failed to make repayments and I've only seen one mention of the covenant breach.

In fact, the only thing I've seen that might cause that to happen is if Quinn Insurance is sold off. In that case, the guarantees given by Quinn Insurance to other parts of the Quinn Group would fail, the foreign investors would take their money, the group would collapse and Anglo would be left holding the ball. Yes the regulator absolutely took the right course of action but Quinn has been allowed to move into a 'too big to fail' situation so it's not just a case of the insurance company anymore. Actions taken against Quinn Insurance could prove perilous for the rest of the group, for thousands of employees all over the country (not just in Cavan), for the DoSFA if they end up on the dole and for Anglo is the loans go unpaid.

Bugnug · 09-04-2010 09:33AM

markpb wrote: »

I don't disagree that white collar crime is rampant and unpunished here but you're missing the point with those two lines above. Businessmen give personal guarantees to investors *all the time*. It's a better than average way of stopping them taking out loans (or leases) and then collapsing the company when going gets tough. Under normal business law, they could walk away without having to pay anything. With a personal guarantee, they are still liable even if the company is gone. There's nothing wrong with it, it's not a sign of anything untoward.

The other thing is that business borrow huge amounts of money all the time. They borrow it for cashflow (in a rolling credit facility), for expansion, for capital expenditure. There's nothing wrong with that. The problem only arises when they can't make the repayments or they breach another covenant. I've seen nothing in the press to indicate that the Quinn Group has failed to make repayments and I've only seen one mention of the covenant breach.

I understand all of that but is it not the case that this guy borrowed all of this money and then through dodgy practices has essentially jeopardised the future of his employees. Not only that but his constant under cutting of his competitors in all sectors in order to remain liquid has put pressure on thousands more jobs. The way I see it this guy is a criminal and he will inevitably be bailed out one way or another and you and me will pick up the tab. Why can the government not fast track new legislation that gives them power to seize all passports, assets and cash accounts of all of these people until they recover as much of the debt as possible? Like I said they did it with CAB.

baalthor · 09-04-2010 09:52AM

markpb wrote: »

Wow but that's childish. Whatever about the cause of the situation, what do you have against those people having jobs? Are you really that bitter!

What happened when QDI entered the insurance market? People (mostly young people) who couldn't previously afford insurance could get it.

If an insurance company has a strategy of 1.lower premiums and 2. higher risk clients, it needs to run a very tight ship financially because 1 and 2 don't really go together.

jimmysull · 09-04-2010 10:01AM

Bugnug wrote: »

I understand all of that but is it not the case that this guy borrowed all of this money and then through dodgy practices has essentially jeopardised the future of his employees. Not only that but his constant under cutting of his competitors in all sectors in order to remain liquid has put pressure on thousands more jobs. The way I see it this guy is a criminal and he will inevitably be bailed out one way or another and you and me will pick up the tab. Why can the government not fast track new legislation that gives them power to seize all passports, assets and cash accounts of all of these people until they recover as much of the debt as possible? Like I said they did it with CAB.

I don't see Quinn as a criminal as you say he is and I have to admit I have a little sympathy for him: He built a business empire employing thousands and one bad investment has jeopardised everything he has spent almost 50 years building. 50 years of endless sound decisions and 1 bad one it seems.
Let me explain; The media have put a spin on it that Quinn brought down Anglo, but let's face it he would never have invested in the company if he knew that the share price was artificially inflated by fraudulent banking practices. It's obvious that even when the share price was falling he was being told it will be ok by advisors/bankers and chased his losses. The Quinn dept is a tiny percentage when compared to the overall debt writeoffs of Anglo and if the Quinn group survives is one of the few Anglo debts that will actually be paid off.
Contrary to the spin that it was Quinn "dodgy practices" that brought down Anglo it was the fraud at Anglo that brought Quinn to the impasse he is at today.
In my opinion if the Quinn Group has enough cash to cover claims but the regulator wants more of a cushion then why not let Quinn fill that cushion out of the 1million a day cash that the business is generating?
We have enough businesses failing here and enough tax payer burden, why are we trying to cause another collapse?

Fat_Fingers · 09-04-2010 10:21AM

jimmysull wrote: »

In my opinion if the Quinn Group has enough cash to cover claims but the regulator wants more of a cushion then why not let Quinn fill that cushion out of the 1million a day cash that the business is generating?
We have enough businesses failing here and enough tax payer burden, why are we trying to cause another collapse?

I could be wrong but i think problem here is that Quinn can't meet his liabilities NOW. 1 million a day and talk about that he will have enough money to cover liabilities in 12 months means absolutely nothing to 1.1Million policy holders today. People who are making claims now don’t care about Quinn Insurance in 12 months - its NOW that he can’t meet liabilities.

And as it happened already there is no guarantee that Quinn might not decide again to siphon out another 200million out of the group when he feels like it.

maninasia · 09-04-2010 10:25AM

jimmysull wrote: »

I don't see Quinn as a criminal as you say he is and I have to admit I have a little sympathy for him: He built a business empire employing thousands and one bad investment has jeopardised everything he has spent almost 50 years building. 50 years of endless sound decisions and 1 bad one it seems.
Let me explain; The media have put a spin on it that Quinn brought down Anglo, but let's face it he would never have invested in the company if he knew that the share price was artificially inflated by fraudulent banking practices. It's obvious that even when the share price was falling he was being told it will be ok by advisors/bankers and chased his losses. The Quinn dept is a tiny percentage when compared to the overall debt writeoffs of Anglo and if the Quinn group survives is one of the few Anglo debts that will actually be paid off.
Contrary to the spin that it was Quinn "dodgy practices" that brought down Anglo it was the fraud at Anglo that brought Quinn to the impasse he is at today.
In my opinion if the Quinn Group has enough cash to cover claims but the regulator wants more of a cushion then why not let Quinn fill that cushion out of the 1million a day cash that the business is generating?
We have enough businesses failing here and enough tax payer burden, why are we trying to cause another collapse?

Did Anglo bankroll Quinn's business, especially after his 25% stake in the bank? Who was funding who?

Bugnug · 09-04-2010 10:28AM

jimmysull wrote: »

I don't see Quinn as a criminal as you say he is and I have to admit I have a little sympathy for him: He built a business empire employing thousands and one bad investment has jeopardised everything he has spent almost 50 years building. 50 years of endless sound decisions and 1 bad one it seems.
Let me explain; The media have put a spin on it that Quinn brought down Anglo, but let's face it he would never have invested in the company if he knew that the share price was artificially inflated by fraudulent banking practices. It's obvious that even when the share price was falling he was being told it will be ok by advisors/bankers and chased his losses. The Quinn dept is a tiny percentage when compared to the overall debt writeoffs of Anglo and if the Quinn group survives is one of the few Anglo debts that will actually be paid off.
Contrary to the spin that it was Quinn "dodgy practices" that brought down Anglo it was the fraud at Anglo that brought Quinn to the impasse he is at today.
In my opinion if the Quinn Group has enough cash to cover claims but the regulator wants more of a cushion then why not let Quinn fill that cushion out of the 1million a day cash that the business is generating?
We have enough businesses failing here and enough tax payer burden, why are we trying to cause another collapse?

Sorry Jimmy but I think you are reacting to this situation in precisely the manner that Sean Quinn wants you to. It is Sean Quinn who has manipulted this situation masterfully, the guy could give tips to Max Clifford. I have zero sympathy for a guy who is worth €6bn (that we know of). Greed and nothing less than greed has put Sean Quinn, his family and his employees in the situation they are in. He is making himself out to be some kind of victim and in one of the most digusting callous displays of cowardice ever wittnessed he is using his 5 thousand employees and their fammilies as pawns in his little game.

oceanclub · 09-04-2010 10:34AM

jimmysull wrote: »

Contrary to the spin that it was Quinn "dodgy practices" that brought down Anglo it was the fraud at Anglo that brought Quinn to the impasse he is at today.

Actually, there's far more dodgy practises than that:

(1) Quinn Insurance doesn't meet its solvency requirements
(2) Quinn siphoned off money from the Insurance bit to buy shares
(3) Quinn build up his 25% stake in Anglo using a method known as "contracts for difference"

The latter practise was why Quinn got himself into such financial trouble. If he didn't realise the property market was overheated, that's idiocy, not fraud.

P.

ei.sdraob · 09-04-2010 10:57AM

Another day, another bailout

my respect for Quinn has been shattered now that i know he owes the taxpayer 2billion+

sigh

Head The Wall · 09-04-2010 11:01AM

AlekSmart wrote: »

http://www.independent.ie/multimedia/archive/00546/quinnprotest4_i_546329s.jpg

I am hugely impressed by the uniform standard of Placard and of Golf Umbrella.

Can it get any better I ask ?? :rolleyes:

I hear Quinn has supplied the Dublin employees with a few boxes of golf balls each and they are going to throw them through the windows of the Financial Regulators office

oceanclub · 09-04-2010 11:23AM

Great summing up over here:

http://www.politics.ie/economy/127508-anglo-quinnish-bankinsurance-aka-quanglo-26.html#post2586854

What a wonderful deal.

Hundreds of millions of euro of state funds, courtesy of Anglo, plus an fairly explicit commitment to plug any future funding holes that emerge anywhere in the Quinn Group, for fear of Anglo not getting its loans paid back should group companies be allowed to go under.

And yes, we’re talking cement, glass and hotels – those cash-rich drivers of the knowledge economy. I wonder what the state's own bondholders will make of that off-balance sheet funding commitment.

On top of that, we're looking at a higher industry levy so the consumers can pay again for someone else's gambling debts. Oh, and the message to any company thinking of entering the market in Ireland that the connected Irish companies will always be looked after, so keep your business to yourselves. Not to mention the job losses at Quinn's unsubsidised competitors.

What do we get in return? An insolvent insurance company, still effectively controlled by the man who ruined it, but nominally owned by a bank that couldn’t manage a corner shop, nevermind another financial services business. Plus some hazy level of control, thanks to the acquired bonds and warrants, over the wider Quinn Group businesses.

What we really get in return is (1) a couple of Fianna Fáil TDs saved, (2) another ticking debt bomb for the next government, (3) a financial regulator who learns, along with the Gardai, not to bother doing his job, (4) a grateful Sean Quinn (and Ireland's oligarchy in general) bankrolling FF with about as much transparency as they complete their solvency returns to said regulator, (5) just for laughs, Anglo pretending it hasn't lost over €2bn on Quinn (it has).

How is it that ad goes? "Insurance fraud is a crime. When someone exaggerates his companys solvency and extorts money from the state, he's putting his hand in your pocket. Report insurance fraud by calling... well, nobody's listening"

Brian Lenihan is the most Machiavellian operator since Dev. There is more and more evidence to suggest he is ensuring that Ireland defaults on its debt and enters the dark ages, but only under the next government. Face it: it’s the cutest way for FF to get back into office, and that’s all that matters.

P.

maninasia · 09-04-2010 11:41AM

It should be declared insolvent, nationalised and then sold off...what's the state sponsored socialism for the rich about.

K-9 · 09-04-2010 11:43AM

Thought this was a good piece, puts it in perspective:
The Quinn Group and a known unknown

Last week, the new Head of Regulation at the Central Bank, Matthew Elderfield, applied to the High Court to have joint administrators appointed to Quinn Insurance because of a breach of solvency rules arising from guarantees totalling €1.2bn, dating from 2005 to 2008, which were provided by eight subsidiaries of QIL to cover the debts owing by the wider Quinn Group to bondholders.

On Monday, a High Court hearing is scheduled on the issue.

There are thousands of jobs at stake but the regulator has to make a judgment on the issue of Anglo extending its exposure to its biggest debtor, in advance of a ruling by the European Commission on State aid.

At a time of very low interest rates, the annual servicing costs of the existing personal debt to Anglo is at least €60m.

To pay this post-tax amount, would require a distribution from the group of over €100m annually - - never mind income to pay down the capital.

There needs to be some clarity on how the debt will be paid, including unavoidable asset disposals.

On the new regulatory regime, to use a French expression, it is important that we don't kill the chicken in the egg.
Organised public campaigns can be as invidious as the system which brought ruin to the economy.

maninasia · 09-04-2010 11:58AM

jimmysull wrote: »

I don't see Quinn as a criminal as you say he is and I have to admit I have a little sympathy for him: He built a business empire employing thousands and one bad investment has jeopardised everything he has spent almost 50 years building. 50 years of endless sound decisions and 1 bad one it seems.
Let me explain; The media have put a spin on it that Quinn brought down Anglo, but let's face it he would never have invested in the company if he knew that the share price was artificially inflated by fraudulent banking practices. It's obvious that even when the share price was falling he was being told it will be ok by advisors/bankers and chased his losses. The Quinn dept is a tiny percentage when compared to the overall debt writeoffs of Anglo and if the Quinn group survives is one of the few Anglo debts that will actually be paid off.
Contrary to the spin that it was Quinn "dodgy practices" that brought down Anglo it was the fraud at Anglo that brought Quinn to the impasse he is at today.
In my opinion if the Quinn Group has enough cash to cover claims but the regulator wants more of a cushion then why not let Quinn fill that cushion out of the 1million a day cash that the business is generating?
We have enough businesses failing here and enough tax payer burden, why are we trying to cause another collapse?

He made a 3 billion euro bet on the shares going up using 'contract for differences', meaning he only had to put a small % of the money down as down-payment. That is hardly 'one small mistake'...more like a Jupiter sized planetary collision of a mistake. Maybe he was just a gambler who piggybacked on the boom...that's all.

jimmysull · 09-04-2010 12:14PM

Fat_Fingers wrote: »

I could be wrong but i think problem here is that Quinn can't meet his liabilities NOW.

@Fat_Fingers
This is where the confusion seems to be. I could be wrong too but it seems that yes the insurance co meet its liabilities now and that it has cash to spare over that. The problem is that in an insurance company you need to be able to cover 150% of your liabilities and he is short on that. He claims that the insurance company has 140% so is 10% short. The regulator hasn't given a number. Yes that is breaking the rules but not sure if you'd call it a crime? If he had 90% then maybe that would be a crime as he would be taking premiums to fill a hole.
If I've misunderstood then numbers I'm open to correction

jimmysull · 09-04-2010 12:18PM

maninasia wrote: »

He made a 3 billion euro bet on the shares going up using 'contract for differences', meaning he only had to put a small % of the money down as down-payment. That is hardly 'one small mistake'...more like a Jupiter sized planetary collision of a mistake. Maybe he was just a gambler who piggybacked on the boom...that's all.

Read my post again, I never called it a "small" mistake. It was a huge mistake, not arguing with you there but it is in contrast to what have been a lot of good decisions over nearly 50 years. you don't grow a multibillion business from nothing if you make bad decisions all the time

K-9 · 09-04-2010 12:18PM

jimmysull wrote: »

@Fat_Fingers
This is where the confusion seems to be. I could be wrong too but it seems that yes the insurance co meet its liabilities now and that it has cash to spare over that. The problem is that in an insurance company you need to be able to cover 150% of your liabilities and he is short on that. He claims that the insurance company has 140% so is 10% short. The regulator hasn't given a number. Yes that is breaking the rules but not sure if you'd call it a crime? If he had 90% then maybe that would be a crime as he would be taking premiums to fill a hole.
If I've misunderstood then numbers I'm open to correction

That's my understanding too. The Company is a Going Concern and is meeting its liabilities that fall due. The problem seems to be guarantees to other Quinn Group Companies.

jimmysull · 09-04-2010 12:27PM

Bugnug wrote: »

Sorry Jimmy but I think you are reacting to this situation in precisely the manner that Sean Quinn wants you to.

I don't think Seán Quinn cares what I think.

Bugnug wrote: »

Greed and nothing less than greed has put Sean Quinn, his family and his employees in the situation they are in.

I do not deny that Seán Quinn may be greedy. You cannot build a multimillion business from scratch without some kind of motivation. If it was greed then fairplay to greed. If that was then his downfall so be it but it doesn't take away from the fact that he and all other shareholders were victims of fraudulent banking at Anglo that inflated the share price so a few execs could get mega bonuses. There is no way anyone, even Sean Quinn would have invested in the bank if they knew it was a fraud.

Bugnug wrote: »

He is making himself out to be some kind of victim and in one of the most digusting callous displays of cowardice ever wittnessed he is using his 5 thousand employees and their fammilies as pawns in his little game.

He may be the architect of his own downfall with his decisions re Anglo & loans but as stated already he IS also a victim of Drumm & Fitzpatrick's bank.
As for his using his empoyees as pawns.....I'm sure I'd be happy to support my employer if he was under attack too if it meant my job was on the line.

Lemlin · 09-04-2010 12:43PM

Quinn have released a statement today:

Quinn Group (“the Group”) notes with concern the recent speculation as regards a requirement to inject €700m into Quinn Insurance Limited (“QIL”). This is simply not the case.

Prior to being placed in provisional administration QIL had assets exceeding liabilities of €230m, i.e.: surplus assets above what is required to pay claims and discharge other liabilities. This exceeds the EU minimum requirement albeit not meeting the Financial Regulator (FR) requirement of 150% of the minimum, due to the impact of losses on property write-downs and investments over the past two years of over €220m.

Unfortunately, due to the FR’s conclusion that guarantees provided by QIL’s subsidiaries gave rise to a potential shortfall in regulatory capital QIL was placed in provisional administration.

In order to restore the solvency position to the FR’s 150% requirement the Group estimates that a cash injection of between €100m and €150m is required. Whilst this is fresh capital it will improve the QIL net asset position and is not required to pay claims, or fill any other holes as QIL has been a profitable business. it is therefore an increase in the value of QIL.

We also note speculation that Anglo Irish Bank Limited (“Anglo”) has plans to refinance some of the existing Quinn Group debt, and whilst we cannot comment on this, it is worth pointing out that any such refinancing does not increase the amount of debt within the Group, but may improve Anglo’s ranking in the debt structure.

There is, therefore, no basis for the €700m deficit figure which is in circulation. Both QIL and the Group are highly liquid, QIL has over €800m of cash available; Quinn Group has cash reserves of €70m and the Group generated cash profits of circa €47m in the first quarter of 2010.

Our manufacturing businesses continue to perform strongly but the knock on impact of the QIL provisional administration continuing will impact on the Group’s ability to invest and expand in the future.

The Group therefore remains focussed on pursuing all options in order to resolve the QIL situation and believes that it is in all parties’ interests that this is achieved as quickly as possible in order to:

- Maintain and protect the QIL business, particularly as it is a profitable business providing much needed employment, focussed on exported financial services.

- Maintain and protect the wider Quinn Group.

- Enable the Group to deal with all of its debt and the family companies to repay their borrowings to Anglo.

I'm not going to comment on any of the above as I work for Quinn myself.

I would like to stress however that the worker protests were workers protesting about their jobs and the threat of losing them.

For example, AIB and Anglo have had billions pumped into them by the tax payer (of which I am one) and their employees received raises this year.
Now staff stand to lose their jobs in a profitable company and have to end up on the dole.
I don't mind who runs Quinn Insurance once I have a job.

IveSeenFire · 09-04-2010 01:01PM

It was my understanding that Quinn brought down Anglo when he decided to sell a huge amount of shares at once thus devaluing Anglo shares and causing instant collapse.

jimmysull · 09-04-2010 01:07PM

IveSeenFire wrote: »

It was my understanding that Quinn brought down Anglo when he decided to sell a huge amount of shares at once thus devaluing Anglo shares and causing instant collapse.

Your "understanding" is wrong and possibly influenced by the spin given to this story by the media
A collapse in share price does not bring down a business unless the business is invested in some way in those shares which it shouldn't be. The share price is a reflection of the market's valuation on a business, when it began to become clear that the share price was fraudulently inflated then the share price collapsed and various shareholders including Quinn started dumping shares. The collapse in the share price did not lead to the massive over-lending and coverup of director loans by the bank. It was the other way around.

loobylou · 09-04-2010 01:10PM

The closure of Quinn insurance would of course be a personal tragedy for the Quinn employees but those jobs will simply move elsewhere.
I have four seperate policies with Quinn, should they close I will continue to have insurance, only with different providers.

jimmysull · 09-04-2010 01:14PM

loobylou wrote: »

The closure of Quinn insurance would of course be a personal tragedy for the Quinn employees but those jobs will simply move elsewhere.

Yes to Jersey or Bermuda. That means more dole payments, less tax etc. That means an even tougher budget next December. Your point?

loobylou · 09-04-2010 01:17PM

If theres a health insurer in Jersey or Bermuda who provide cover in Ireland please let me know.

jimmysull · 09-04-2010 01:18PM

loobylou wrote: »

If theres a health insurer in Jersey or Bermuda who provide cover in Ireland please let me know.

So you think all the other insurers in the Irish market are Irish companies??? Aviva who own "Aviva Healthcare" has offices in both Bermuda & Jersey.

If Quinn gets taken over by another insurance company the jobs will go. The other insurers don't need more employees in Ireland and will probably just add backoffice staff in one of their tax haven subsidiaries.

loobylou · 09-04-2010 01:24PM

VHI is

jimmysull · 09-04-2010 01:26PM

loobylou wrote: »

VHI is

VHI won't be taking over Quinn Insurance. If Quinn Insurance goes the jobs will go. Your point about the jobs will just go elsewhere is still correct but they will not be in ireland

Lemlin · 09-04-2010 02:25PM

loobylou wrote: »

The closure of Quinn insurance would of course be a personal tragedy for the Quinn employees but those jobs will simply move elsewhere.
I have four seperate policies with Quinn, should they close I will continue to have insurance, only with different providers.

Yes, the jobs will move to somewhere like India, where Hibernian have all their call centres.

It costs the government 20,000 per person on the dole they reckon. If Quinn Group goes that 5,500 people at 20,000 a year = 110,000,000.
That's why something needs to be done to save the jobs.

Anglo to put €700m into Quinn

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