Private equity firms join Anglo Irish Bank in possible bailout

Quinn will most likely face a "short-ish" period of administration lasting a year or so before being sold off, the Sunday Tribune reports.

The Irish Post said Quinn executives have said they are working on a number of potential options but that the Anglo Irish Bank (AIB) deal remains the preferred option as it helps deal with Sean Quinn and his family’s borrowings of €2.8bn from the bank. But the group has also held exploratory talks with various private equity funds about a capital injection.

But the regulator is said to be lukewarm about any deal that would leave the insurance company in the Quinn Group - even if Sean Quinn had little interaction with it.

Private equity

The Times said DB Private Equity, a branch of Deutsche Bank, is one of at least three private equity groups in talks with the Quinn Group about investing fresh capital into its insurance business.

Private equity investment is being sought to reduce Anglo Irish Bank’s role in a rescue plan. It is proposed that private equity would put up the €150m of capital required to help the insurer meet its solvency obligations. The capital injection will result in a private equity investor taking a significant stake in the group.

Anglo and senior debt provider Barclays Bank will then press ahead with a debt restructuring at the wider Quinn Group and, in particular, organise the refinancing of €600m of bonds held by a group of 20 investors.

US bondholders

The bondholders are largely US- based insurance companies and include New York Life Insurance, Guardian Life Insurance, Aviva Capital, CUNA, Nationwide Insurance, and Ohio National Life Insurance.

Barcap, the private equity division of Quinn lender Barclays, may also be a candidate for investment.

Michael McAteer and Paul McCann of Grant Thornton and joint administrators of Quinn Insurance, will this week write to up to 30 interested parties updating them on the administration.