Administration expected to last a year, but eventual sale most likely outcome once the Irish insurer gets back on sound commercial footing
Quinn Group bowed to the inevitable this week, accepting the Irish Financial Regulator’s decision to place it in administration in a bid to reach a compromise and secure its return to the UK.
In a statement released last Friday, Quinn Insurance said it had withdrawn its objection to the regulator’s High Court petition for the appointment of joint administrators.
Quinn Insurance chairman Jim Quigley said: “This decision has been taken after very careful consideration. We have concluded that, given what has happened, it is in the best interests of the company, our employees and policyholders that, as a matter of urgency, we work closely with the administrators and the Financial Regulator to get the situation resolved as quickly as possible.
“In particular, we would hope that working together we can find a way to recommence business in the United Kingdom.”
The administration is expected to last around a year, with an eventual sale being touted as the most likely outcome once the insurer is on a sound commercial footing.
Sale talks with the state-owned Anglo Irish Bank have been widely reported. Anglo Irish wants more security over the €2.8bn (£2.5bn) it is owed in personal borrowings by group founder and chairman Sean Quinn.
Quinn Group is believed to be looking at a number of options, including a private equity cash injection. It reportedly has held talks with private equity houses, including DB Private Equity, a branch of Deutsche Bank.
Following Quinn’s climbdown, the Irish High Court formally appointed administrator Grant Thornton on 15 April. It will deliver its first report within a month, and the case will reappear before the court on 20 May.
Grant Thornton said in a statement: “As administrators of Quinn Insurance, it remains our court-appointed duty to place the company on a sound commercial and financial footing.
“We already have a highly skilled team on location in Cavan, Dublin, Navan, Manchester and Enniskillen that will continue assessing the Quinn Insurance business.
“Since our appointment as provisional administrators on 30 March, we have received excellent co-operation from the staff and management in all locations in what have been difficult circumstances.
“We will continue to engage constructively with staff and management at QIL as we endeavour to secure the future of the company.
“Customers will continue to be unaffected by our appointment – all valid claims will be met.”
The Irish Financial Regulator ordered the provisional administration of the insurer last month because of its concerns about Quinn Insurance’s solvency levels, prompted by its financial commitments to other parts of the Quinn Group.