Quinn Insurance in Administration

[supersarsfields]

As far as I know BB that's pretty up to date. The proposal was drawn up and stress tested along with PWC.

Why do you think it's unrealistic? The figures for the first few years were actually provided by the administers.
Even if it only hit 70% of what it was estimating it would still be a better option for the tax payers than the current deal.  And that's before you take into account job loses etc.

[orangeman]

Is this a man resigned to defeat ?

Sean Quinn upset at Quinn group restructure

Sean Quinn has said the decision by Anglo Irish Bank to appoint share receivers to the Quinn group was the "greatest upset" in his entire business career.

It was announced on Thursday that Mr Quinn would no longer have any role in the management of his company.

The bank said that Kieran Wallace of KPMG would take control of the Quinn family's shares.

The businessman and his family owe Anglo Irish Bank 2.88bn euros.

Other lenders to the Quinn Group are owed almost 1.3bn euros.

In a statement, Mr Quinn said he and his colleagues had spent the past year developing a proposal which would have allowed them to "discharge fully all the family's obligations to the Irish tax payer".

He said that during this time he had consulted with some of the most respected and experienced individuals in Irish and UK business.

"I am utterly convinced that our proposal could achieve the retention and increase of skilled employment in the group," Mr Quinn said.

The businessman blamed the banks for the company's financial downfall.

'Life sentence'

"Our mistake was to place an over reliance on the Irish banking system and the many predictions for continued sustained growth in the Irish economy from some of the country's leading financial services experts," he said.

"Ireland needs enterprise and entrepreneurs more than ever at this time but mistakes in business should not result in a life sentence."

The Fermanagh man thanked customers and staff for their "huge contribution" to the company's success.

"There is no workforce anywhere that has the talent, commitment, loyalty and determination of the Quinn workforce," he said.

"They have created and sustained skilled employment in regions where this was not seen as possible before."

Mr Quinn said the extensive media coverage since last week's announcement had resulted in some "inaccurate and false" reporting.

A five-year restructuring plan has been agreed between Anglo and the Quinn Group's lenders, aimed at stabilising the businesses, which are described as "fundamentally good and profitable".

Repayment of debt

Anglo Irish Bank chief executive Mike Aynsley said the bank was owed an "enormous" amount of money by the Quinns, which they were not in a position to repay.

He said the bank had taken an approach which protected the businesses and paved the way for maximising the repayment of debt to the Irish tax payer over time.

The company also revealed that Liberty Mutual and Anglo Irish Bank was the preferred bidder for the company.

Liberty Mutual would provide the management and insurance expertise to Quinn Insurance.

Anglo Irish Bank will retain a minority share holding in the new firm but will have no dealings in the day-to-day management of the new company.

It is hoped a deal will be finalised within the next four to six weeks.

[muppet]

"Our mistake was to place an over reliance on the Irish banking system and the many predictions for continued sustained growth in the Irish economy from some of the country's leading financial services experts," he said.

Dem's High Court words, imho, allegedly, caveat emptor.

[orangeman]

"Our mistake was to place an over reliance on the Irish banking system and the many predictions for continued sustained growth in the Irish economy from some of the country's leading financial services experts," he said.

Dem's High Court words, imho, allegedly, caveat emptor.

Quite possible alright.

Sting in the tail en route. Papers lodged shortly.

[Declan]

Our mistake was to place an over reliance on the Irish banking system and the many predictions for continued sustained growth in the Irish economy from some of the country's leading financial services experts," he said.

No recognition of any culpability on his own behalf. He made me do it mammy!

[Bogball XV]

As far as I know BB that's pretty up to date. The proposal was drawn up and stress tested along with PWC.

Why do you think it's unrealistic? The figures for the first few years were actually provided by the administers.
Even if it only hit 70% of what it was estimating it would still be a better option for the tax payers than the current deal.  And that's before you take into account job loses etc.

To be honest I think the plan is pretty simplistic and very, very vague.  I understand that in situations such as this applicants think that being vague will help their chances, hoping that the other party will not understand what is going on, but it is the wrong approach in this instance.
For example, it's page 12 before we find out that Quinn needs €650m from the taxpayer, and even then it's not exactly highlighted.  That's after reading all sorts of executive summaries and key points etc etc.  Did they not think that might be a key piece of information?
On that same page the report attempts to get a dig at the regulator by stating that the prevailing view is that his requirements are too stringent.  Evidence accompanying that would be good, it's not just enough for a report to state that. 

Page 13 mentions how QIL manages to achieve a Combine Operating Ratio of 8.4% below the market average and directs us to page 19 to see how this is possible, as this is probably the main advantage of the QIL proposal as opposed to a third party, I took a look – page 19 is utter waffle.

The forecasted earnings on Page 9 would need some examination, of course forecasts are precisely that, but there are some fairly major assumptions here.
I confess I don't have much understanding of the figures here, what is the difference in gross written and gross earned premium?  Nor do I understand how they translate to net written and net earned premium.  But the profitability based on net earned premium (which seems to be the key figure) less claims incurred rises every year from 2010 onwards.  From 15% up to 22.5% in 2017, this even though the company envisages growth in net earned premium from 819M in 2011 up to 1114M in 2017, normally companies grow by that sort of multiple by sacrificing profitability and even more so in current market conditions.  Why do they expect premium income to increase by 36%, yet for claims to only increase by 25% - Gay Byrne's road safety campaign?
Another problem on this page is that admin costs as a percentage of net premium income also drops significantly from 9.9% in 2011 to 8.2% in 2017 (it was 12.1% in the current year, but I've disregarded that because presumably UK are still included?), of course a drop in costs like that may be achievable, but there's nothing indicating why or how that is to be achieved.

At the bottom of the page they note that Deutsche bank (Anglo's advisers) and their own advisers have reviewed the plan, significantly they don't even mention who their advisers are or what comments they made on reviewing, given the lack of mention it would appear that they did not want their name on this report in any capacity.

There are more problems with the proposal but I don't have the time to get into them, in my view the proposal is unprofessional and doesn't stand up to much scrutiny.
There's no mention of inflation, of the general economic conditions, of further interest on the 2.8Bn borrowings etc etc.

In my opinion it was written for general public consumption, to try and garner public support in the Cavan/Fermanagh region, this is exemplified by the way they constantly deride the other bid and show how only QIL is really wearing the Green jersey.
This was not a proposal that could be put to government or any lender in today's climate with the hope of being successful. 

Essentially the Quinn family are asking the state to lend them 650M so that they may retain an asset which if everything goes according to the projections in the report can be sold for 2Bn in 7 years time.  This 2Bn along with the sale of several other assets will realise 2.8Bn which the Quinn family can then use to discharge their debts.

I don't have anything against the Quinn's, I have always had a lot of respect for Sean Quinn and his brother, but honestly, how could they have expected the state to do this?  Sure couldn't any developer or property investor ask the state to lend them a few quid so they could keep up the mortgage repayments whilst they start an alternative business which they would hope they could sell to pay back the combined debt in a few years time.

[supersarsfields]

I'd agree that the proposal is optimistic and vague as well. This is a cut down version than what went to the administers, as in dumbed down for the public.

I'll try and do the best I can from what I know about the issues you raised.

The issue about the 650m Euro not been mentioned earlier is prob a case of get in with the positives first. No point starting with the negative first I suppose. Also this money is getting put in by the tax payers regardless. Anglo are stumpting this up for the Liberty deal as well. And it should be mentioned that this money is just to have on the books for solvency and wouldn't be needed to be spent unless in the worst case scenario. I understand the problem with that is that it's 650m tied up here that could be used elsewere and that's a genuine problem.

With regards to the operating profit I agree I don't see where they get this figure from. So agreed that's a pretty big mess up there. But I would have assumed that these figures would be available somewhere. But regardless your right they messed up not giving where this came from.

The forecasting would be an area I'm not strong on at all. I know that the first few years figures were actually supplied by the administers so therefore they seem to think they are realistic.
I can't really comment on most of the rest of your points with regards to these forecasts as I don't have a clue when it comes to accounts like this. Accounts definitely wouldn't be my strong point!!
The reason they expect premium to increase but not claims to the same extent is down to the new pricing structures that has been put in place. They are reducing their reliance on high risk areas such as young drivers which is a area that QD would have targeted in the past. And the admin figure would be standard enough I would have thought, that it decreases per policy with volume?

I can understand the last part with regards to why they should not do this. The problem of the interest is a huge one and one I noticed my self. But in the liberty proposal they are now taking a minority of the profits (As opposed to all of them if it stayed as QD).

I understand there is problems with this proposal. But I still think it was the best one on offer. The one they have entered into now means a shortfall in the debt by about 2B if the papers are right. They might not have liked doing the deal to keep it in Quinn but it was workable and would have given them a better chance of recouping their money. It just looks now like the cure is worse than the disease.

*Disclaimer *
I know I have Quinn tinted glasses on!!

[supersarsfields]

<sup>Published on Wednesday 20 April 2011 15:43

DESPITE Government assurances that no jobs will be lost as a result of the Anglo Irish Bank takeover of the Quinn Group, local employees and businesses fear that this is not enough to safeguard their futures.

DESPITE Government assurances that no jobs will be lost as a result of the Anglo take over of the Quinn Group, local employees and businesses fear that this is not enough to safe guard their future.

Last Thursday, April 14 it was announced that the Anglo -Irish Bank/ Liberty Mutual proposal are the preferred option for the future of Quinn Insurance and that Anglo Irish Bank has appointed a share receiver to take control of the majority shares held in the group by the Quinn Family. The rushed decision and the swift move in of administrators to the entire Quinn Group has left many unanswered questions about the future of local jobs in the group.

By Fiona Heavey and Leonie McKiernan

Local Quinn Group employees told the Leitrim Observer "this is terrible news, we will be squeezed down to nothing in less than 12 months, our jobs will be gone, the assurances mean nothing."

It is understood that a number of large scale Irish contracts were withdrawn from Quinn businesses last Friday morning in protest over the Quinn family ousting. The contracts are believed to have hit Quinn glass and building product businesses and have done little to convince employees about long term job security.

Leitrim TD Michael Colreavy said he remains very concerned for the future of jobs in the Quinn Group. He said important questions remain unanswered in relation to the events of last week. He said the priority must be to safe guard local employment. Colrevy added that he would seek the reasons why anyone would regard Anglo Irish - a zombie, non functioning bank as a suitable institution to maximise the protection of Irish taxpayer funds.

Chairman of the Quinn Jobs Action Forum Tommy Moran from Ballinamore said "It is ridiculous to say there will be no job losses." He said, "I can't see them keeping many sectors open that are not profitable."

He said many branches of the Quinn group were kept going by the group, relying on successful sectors "they were kept alive out of loyalty to the employees."

So called 'vulture' bond holders are being blamed for forcing Anglo's hand on the Quinn Group debt. The Leitrim Observer has learned that bond holders had sold on their bonds at a substantial loss to companies which specialise in acquiring bonds of companies in difficulty. These so called 'vulture' bond holders then put pressure on Anglo Irish Bank to redeem the debt outstanding against the Quinn Group resulting in bank taking over the Quinn family share in the business last Thursday.

To read the full story and for a special report examining what exactly has taken place over the past week and reaction to the take over by Anglo Irish Bank by Sean Quinn himself, his supporters and people locally see this week's Leitrim Observer.</sup>

It seems that there has been a fair few very large irish companies that have pulled the plug on the cement factory and more pledged to follow. And if rumours are to be believed one massive glass contract has also pulled out. Unfortunately I can't see how there won't be job losses as a result of this. Not to mention the value of the companies plummet.

[Bogball XV]

It seems that there has been a fair few very large irish companies that have pulled the plug on the cement factory and more pledged to follow. And if rumours are to be believed one massive glass contract has also pulled out. Unfortunately I can't see how there won't be job losses as a result of this. Not to mention the value of the companies plummet.

Why have large irish companies pulled contracts from cement and glass?  What difference to them who owns the insurance group?  What Irish companies even have large contracts with cement in particular any more?

I think it's obvious that jobs will have to go in cement in particular, I suppose it's how those job losses are structured.  The article implies that whilst cement and glass would be going through rough times regardless, the profitable parts of the group would keep them going out of loyalty - do you believe that?  Sean Quinn didn't build up businesses by allowing loss making sectors to exist, maybe for a year, but these sectors won't be revitalised for a long time.  Surely propping these up would be another another drain on the profits made by QIL which were already earmarked for repaying the Anglo Debt.

I don't want to appear to be constantly picking holes in what your posting SS, but this reeks of more green jersey style spin to me.

[ludermor]

As someone who takes out large contracts for concrete and blocks for a large builder i can guarentee you that personal loyalty to a company is almost unheard of and it boils down to best value for money and comfort the supplier can deliver the contract. If people are pulling contracts id venture its more to do with the fear teh company will cease rather than loyalty to a man/company

[supersarsfields]

The irish companies have pulled out as either in loyality to SQ or out of a refusal to deal with Anglo.

Cement and glass are two of the profitable parts of the QG. In fact Glass was the biggest earner for QG after the insurance. It was these areas that were keeping other less profitable areas such as packaging afloat.

By the way I'm not saying that the Quinn deal would have been a great deal for taxpayers. But I do believe it was the best one avaliable to offer any chance of debt recovery and to secure jobs in that area. The option they have taken is going to do neither.   

[Bogball XV]

SS, what is happening the rest of the group other than QIL at this stage?

[supersarsfields]

There was directors appointed to certain factories by Anglo over the last few days to take over the running of the companies. I would imagine they will start trying to split them into seperate identies shortly (for instance radiators have people working out of the glass factory and the like). Apart from that there's been little change. I think the plan is to bring consultants in to assess the businesses but don't think that is happening yet. They've settled some of the higher directors and managers and paid them of.

[muppet]

There was directors appointed to certain factories by Anglo over the last few days to take over the running of the companies. I would imagine they will start trying to split them into seperate identies shortly (for instance radiators have people working out of the glass factory and the like). Apart from that there's been little change. I think the plan is to bring consultants in to assess the businesses but don't think that is happening yet. They've settled some of the higher directors and managers and paid them of.

Without naming people, can you do a Google on these new directors from Anlgo and tell us are they:

a) career Anglo people;
or
b) professionals parachuted in from reputable (if there any left) financial institutions;
or
c) Healy-Raes, Lowry's, ICTU/IBEC types;

[supersarsfields]

Haven't a clue muppet to be honest. The fiancé works in Quinn radiators so it's her who's keeping me updated on the group but no mentions of who directors are. But I don't think they are Anglo employees (at least I hope not!!)