Disappointment at failure to consider Quinn/Anglo bid

“If the plan is not allowed to proceed then I would be concerned that there would be a significant demise of Quinn Insurance and other elements of the group and that is of major concern to us,†said Mr. Kevin Lunney, director of Quinn Group ROI Ltd when speaking in the Hotel Kilmore on Friday evening. Mr. Lunney was referring to the Quinn Anglo plan which surprisingly has not been submitted for evaluation in the bids being considered for Quinn Insurance, the sale of which is expected to take place within the coming two weeks. “It is a huge disappointment to us now that this plan has not been put forward to the administratorsâ€, said Mr. Lunney. “We have not received any clarification or any coherent response as to why that has occurred. I can assure you that if the plan is adopted it will be successfulâ€, he said. The meeting in the Hotel Kilmore was convened by Cavan Chamber and attended by politicians, Quinn Insurance employees and concerned members of the public. According to Mr. Lunney what was being proposed for Quinn insurance under the Quinn Anglo plan was simple. “The Quinn family establishes a new company and the company acquires a nominal value. Anglo then lends the necessary funds to that company and it restores the solvency to pay back the banks and bond holders which has been one of the sources of criticism by the financial regulator and removes that item from the agenda. At the same time it restores solvency to the level required by the financial regulator. There will be a newly appointed board, where the Quinn family will have no involvementâ€, he explained. All of the profits of that company and all of the future value of that company in any future flotation in seven years time will be used to repay the debt. “The proposal which we have been working on for nine months must be supported. Yes, it requires funds from the state through Anglo Irish Bank but it does protect the employment in Ireland and facilitates the full repayment of the debt. We believe it makes the best use of the state resources for the benefit of the state and retains a hugely important indigenous Irish company and a return of €2bn for the taxpayer,†said Mr. Lunney. According to Mr. Lunney all of the proposals from the different bidders should be transparent. It was not good enough “that you, the employees, do not know what impact these proposals will have on your futureâ€. Those who worked on the Quinn/Anglo plan could not understand why it had not been put forward because other models showed “a major downside†to this particular option. “We urge all decision makers to ensure that the Quinn Anglo plan goes forward. The taxpayers have a right to know how their funds are being used and you have a right to know what is happening your futureâ€, said Mr. Lunney. Mr. Lunney revealed that he and his colleagues had been working on the plan for the last nine months. He and Darragh O'Reilly were executive directors on the Quinn Group ROI board “the board that represents the Quinn family in all its interests in the Quinn Group, including its interests in Quinn Insuranceâ€. Dave Mackey had been on the board since early last year as a non-executive director. “He has been assisting ourselves and the Quinn family in relation to all of the aspects we now find ourselves in – we are hugely grateful for thatâ€, said Mr. Lunney. Mr. Lunney explained that they formulated their proposals in conjunction with Anglo Irish Bank in a manner which protects the Irish state and takes account of the superior performance of Quinn Insurance. “Preliminary plans were put in place over the past nine months – they were confirmed and stress-tested, promoted and advised upon and taken to a point of execution at the latter end of 2010. It is a huge disappointment to us now that this plan has not been put forward to the administratorsâ€, said Mr. Lunney. The plan was designed to protect all the existing jobs, maintain insurance competition in the country, repay all the shareholder debt and create significant new export opportunities across the group. Mr. Lunney explained that the proposal required an investment over a seven-year period by the state owned Anglo Irish Bank – so it was an investment by the state which would enable full repayment of the €2.8bn Quinn family debt to the taxpayer. “It will retain significant competition within a market that Quinn Insurance has been part of for 14 years and ensure the retention of the 6,000 jobs across the Quinn Groupâ€, he said. Investment by the state at this juncture was critical and the upside was €4.6bn over the next seven years, he added. Speaking later with the Anglo Celt Mr. Lunney said that if the Quinn Anglo proposal was not accepted there would be €2.8bn in debt that will not be recovered (That will be €2.8bn out of €4.6bn). “We have calculated from increased operations that if the Anglo/Quinn deal goes ahead there will be continued and increasing jobs - up to 1,000 new jobs over the next three years over the entire group. The increased operations and tax would give €850 million tax revenue. Then there is a broad estimate for the additional businesses and downstream businesses and social benefit is put at €1 bnâ€, he stated. He also estimated that whatever investment the state put into Quinn Insurance it would yield €2bn in earnings to the state when the company was sold in seven years' time.