Was Anglo bailed out to support the Quinn Group?

T

tiger

Registered User
Messages
1,159
To my mind these €3BN loans to Anglo have only come to the fore front in recent months and weren't public knowledge when the bank guarantee was given?
Was part of the aim of the guarantee a misguided attempt to give the Quinn group more breathing room?
The insurance business may be profitable, but I would expect they've had a tough 6 months with the heavy flooding and cold spells/icy roads we've had this winter.
 
Brendan said:
Hi Sunny

I would say that the FR is very concerned about the implications of problems in Quinn Insurance Ltd for Anglo. You can be quite sure that we now have joined up thinking in the FR. They will be acutely conscious that selling off Quinn in a firesale could cost Anglo aka the taxpayer €3bn. I would think that he will look at the big picture.

But he won't be deterred by ill-informed protests and poitical pressure, such as it is.

Brendan
Click to expand...

I was thinking that a sale would be a win win situation except for Sean Quinn who would be losing part of his empire. If QI is profitable and is a business with good long term prospects, then it can be sold for a good price - probably to a multinational looking to get into the Irish market or to one of its competitors in Ireland. Cash gained by SQ could be used to unburden or pay back the loans that are secured on QI. If these loans came form Anglo, then Anglo would get some liquidity.

Win Win -

QI gets unburdened reserves, so would be taken out of administration and could continue without the risk of the Quinn empire taking it down.

Sean Quinn can pay back some of his loans.

Anglo will get repaid for some of its loans to Sean Quinn.
 
Sunny said:
The simple answer is no.
Click to expand...
(Maybe this should be a separate thread), in my attempt to piece all of this together, I'd like to understand your thinking here.
Is there not some speculation that Lenihan & Cowen acted against advice in including anglo? (e.g. )
 
tiger said:
(Maybe this should be a separate thread), in my attempt to piece all of this together, I'd like to understand your thinking here.
Is there not some speculation that Lenihan & Cowen acted against advice in including anglo? (e.g. )
Click to expand...

Maybe they did include Anglo against some advice but I don't think for one second they did that to bail out or help Sean Quinn, Property Developers or Golden Circles. Whatever one thinks of the decision, I refuse to believe that ANY politician would mortgage this Country to bail out some friends. They did what they thought was right. Plenty of people including myself thought it was the right move at the time. I can now see that the Guarantee was too crude an instrument and that we might have been better off letting Anglo go. Then again, I have no idea where we would be now if we had done that.
 
Sunny said:
Plenty of people including myself thought it was the right move at the time. I can now see that the Guarantee was too crude an instrument and that we might have been better off letting Anglo go.
Click to expand...
And those who pointed out the very serious risks at the time were just ignored.
 
Complainer said:
And those who pointed out the very serious risks at the time were just ignored.
Click to expand...

Just because the advice wasn't followed doesn't mean it was ignored. I often get differing advice in my job. My job is to take all the advice and make the decision. I might be wrong and I might be right. Doesn't mean I ignored peoples advice.
There are plenty of reasons that the Government can show why they had to do what they did. There are plenty of reasons that people can show why they shouldn't have done it. The politicians are elected and paid to make the final decision.
 
Latest headline is: "Anglo plan to inject €700m into Quinn".

Pardon my simple reasoning, but, is this not €700m of OUR money? Is it not preferable to let a private company buy Quinn?
 
I think Anglo wants to get rid of the Admistrator as quickly as possible so that their investment is protected. A long term administration would damage the Quinn Group's viability.

So I suspect that Anglo would buy it with a view to refurbishing it and selling it on.

Brendan
 
Brendan said:
I think Anglo wants to get rid of the Admistrator as quickly as possible so that their investment is protected. A long term administration would damage the Quinn Group's viability.

So I suspect that Anglo would buy it with a view to refurbishing it and selling it on.

Brendan
Click to expand...
What is your view on what Brian Carey said on PrimeTime , regarding the fact that if the capital hole in Quinn is now at 700m (up from 100mil originally) then the state would probably have a very hard time offloading such an insurance /business group off to private investors any time soon....

-Ian
 
Folks

There are many other websites on which you can talk off topic rubbish about conspiracy theories and FF bailing out builders.

This thread asks a very serious question. Stay on topic.

Brendan
 
It's very difficult to assess what is happening here.

I guess that Quinn Insurance is profitable in its own right.
But it have been used to guarantee and fund unprofitable businesses and, maybe, personal borrowings.

Option 1
let the whole lot go to the wall and have a fire sale of the assets.

Anglo, i.e. the taxpayer, loses another €3bn and the taxpayer will end up paying for the losses of the insurance company. 5,500 jobs will be lost but other companies will replace the Quinn businesses.

Option 2

Try to negotiate a deal with the Quinn Bondholders and salvage the insurance company into something worth selling.

Let the rest of the Quinn Group go the way of all failed businesses. Put them up for sale or close them down if they are not viable.

I would go with option 2.

(Conflict of interest: I have shares in CRH who might well benefit from the disappearance of Quinn Cement and other companies. However, I think that the impact on CRH would be minimal)
 
I would agree with option 2, though I suspect parts of the Quinn group are in serious trouble and as such there will/should be some losses.
To my mind though Anglo is a failed institution and should not be used as a vehicle of convenience in any of this. If the govt has to get involved, so be it, but more directly.
The sums of money in NAMA are so huge that now we think nothing of sinking a further €700m to 'protect' a debt of €2.8Bn ???
 
It seems odd at first site that Anglo is bailing out Quinn. But the money is owed to Anglo and so they must deal with it.

The people in charge of Anglo now are completely new and different to those who got us into this mess.

That is not to say that we shouldn't challenge them or question them - but don't just assume that they are incompetent.

Brendan
 
There is a 3rd option Brendan. Quinn revokes or walks away from whatever guarantees were put in place on the assets of the insurance company. We probably need to know a bit more about these guarantees before we decide this. There is no way that the State should again be left to pick up the tab, particularly if these guarantees relate to personal borrowings of family members. We can't let them away with the 'privatise the profits, socialise the losses' approach.

tiger said:
To my mind though Anglo is a failed institution and should not be used as a vehicle of convenience in any of this. If the govt has to get involved, so be it, but more directly.
Click to expand...
Absolutely agree. The heads at the very top may have changed, but it is still that same heads doing the day to day work that got us into this huge mess.
 
Apologies if off topic but remember what happended to Allied Irish banks in 1985 following their investment in Insurance Corporation of Ireland
 
Complainer said:
There is a 3rd option Brendan. Quinn revokes or walks away from whatever guarantees were put in place on the assets of the insurance company. We probably need to know a bit more about these guarantees before we decide this. There is no way that the State should again be left to pick up the tab, particularly if these guarantees relate to personal borrowings of family members. We can't let them away with the 'privatise the profits, socialise the losses' approach.
Click to expand...

Unfortunately I'm not sure that the guarantees can be revoked without the bondholders consent. On the other hand I would have thought that guarantees that have the effect to reduce Quinn Insurance's unemcumbered assets below a statutory minimum solvency ratio ought to be void as being against the public interest (and if it isn't maybe the law needs to be amended so that if future they would be).
 
I assume the validity of these guarantees has been closely examined in view of the rather complex conditions laid down by our Companies Acts. Apart from the latter I always understood that a company in giving a guarantee must be seen to get tangible benefit and is commercially justified. I know that in a group situation this is deemed to occur.
 
dam099 said:
I would have thought that guarantees that have the effect to reduce Quinn Insurance's unemcumbered assets below a statutory minimum solvency ratio ought to be void as being against the public interest (and if it isn't maybe the law needs to be amended so that if future they would be).
Click to expand...
Absolutely, with one amendment. The law should be amended retrospectively to void these guarantees.

The Quinn Group guy on Marian Finucane was making a big show about how the guarantees would never be called in! He avoided Marian's question about why they couldn't be just rescinded then.

We need to know who these guarantees were given to - were there family members or related parties involved?
 
You must log in or register to reply here.
Back
Top