Lobby group floats bonds idea in bid to save Quinn
A lobby group of companies that do business with the Quinn Group has called on the Irish Government to launch a bond to bridge Quinn Insurance's €700m solvency shortfall.
Concerned Irish Businesses (CIB), a group of 352 firms in the Republic and Northern Ireland that employ 12,000 people, yesterday made a series of recommendations to the Republic’s financial regulator in a paper titled “The Way Forward for Quinn Direct Insurance”.
Its key idea is that the Irish Government either issue a bond to cover the solvency shortfall at the company, or issue a surety to a private institution that would provide such a bond, with interest paid by Quinn Insurance at normal market rates.
The insurer was put into administration at the end of March, and stopped from writing some UK business after the Irish Financial Regulator Matthew Elderfield became concerned it was not holding enough reserves to cover its liabilities.
Nine hundred of the company’s 2,600 employees — 200 in Enniskillen and Derrylin — are set to lose their jobs. Around 40 interested buyers are reportedly circling the company, including Anglo Irish Bank, which Quinn owes substantial debts.
The lobby group, which is not backed by Sean Quinn, recommended that a repayment schedule be drawn up between Anglo Irish Bank and the Quinn family over the outstanding loans.
It also urged regulators to lift all sanctions imposed on Quinn, to allow the company to operate under normal market conditions.
It also recommended a new seven-person board be appointed, with three members appointed by the Irish Government, three nominated by the Quinn Group including one member of the Quinn family, and an independently appointed chair.
Spokesman John Maguire said the proposals answered the watchdog’s concerns over solvency, corporate government, and management, and offered the Irish Government an opportunity to “do the right thing”.
“We feel that under the terms outlined, all interested parties including the Irish taxpayer would have to compromise, however Ireland would retain a successful company, jobs would be saved, and the financial and social facets of peoples lives supported.”
The group are due to meet the financial regulator on June 10.
Adrian McCaffrey, who runs construction equipment firm MC Hire in Enniskillen, is a business customer of Quinn Insurance and supplier to the Quinn Group.
“What we are interested in is finding the best solution. If the buyer is found for Quinn Insurance from outside of Ireland, it means that Quinn will default on the loans he has with Anglo Irish Bank, and therefore the Irish taxpayer will foot the bill. That’s not in the best interest of anybody,” he said. “The knock on effect is disastrous for the communities we live in. There no other jobs.”
A spokesman for the Financial Regulator said: “We cannot provide details on individual meetings. We remain open to meeting to discuss regulatory issues/concerns with related parties as requested.”
Administrators Grant Thornton declined to comment on the proposals.