Quinn’s loss on Anglo put at €2.5 billion

Quinn’s loss on Anglo put at €2.5 billion -> timesonline.co.uk/tol/news/w … 991219.ece

Assuming that this loss estimate or even the 1billion loss estimate is true, how has Quinn managed to cover these losses? At the peak he was being valued at 4billion, but he is unlikely to have had anything between 1-2.5billion in easily available funds, so did he borrow the money and is so from whom?

The brokers that held the CFDs for him are mainly non-irish; would he have been given the same leeway by them as he may have done by an Irish company?

What’s that in your pocket? Oh, it’s Mr. Quinn’s hand… come from the past of non-recourse loans for shares…

So Quinn borrowed the money for the losses from Anglo - and those loans were non-recourse?

Is this allegedly or do we know?

Ah, alleged. Quite often. By a disparate group. Not denied…

:open_mouth:

It just gets more unbelievable (for me anyway - but then I’m a blow-in). I just assumed that not even Anglo could have issued a non-recourse loan of 1billion+. The Golden 10 were outed with their non-recourse loans, so how come I’ve sen nothing in the press on this?

I’m hoping I’ve missed it because it was sub-judice pending a large fraud trial…here’s hoping.

Actually, I believe they got a charge over Quinn’s shares in the Quinn Group, if memory serves me. Two problems with that:

  1. The ownership structure is quite opaque.
  2. If they ever had to call it in, I’m it would surely be the collapse of the group?

But that only accounted for, I believe, 1 billion. The new rumours are that the loss was more than that and the rest is on the never never.

Could it have been that the bonds that shouldn’t have been covered by the guarantee, were in some way linked between Anglo and Quinn.
Let’s assume an insurance company was the holder of these bonds and were the bonds not secured and were the government of the opinion not to guarantee these bonds. Then this insurance company could have gone bang… and with it any other businesses in the empire?
The guarantee may have been intended to cover the known knowns… ie the guarantee may have been a government not realising what the fcuk they are doing, deciding that to put in place such a guarantee may have seen them avoiding a scenario where the Quinn group was wiped out. After the guarantee the had no choice but to declare Anglo of systemic importance as they state was going to pick up the pieces either way.

Let’s face it… we’re not dealing with geniuses here… I’d put the state we are currently in down to a government making lots of poor decisions instead of one good one that get’s them and their buddies off the hook.

I could imagine that Quinn’s relationship with Anglo had something to do with the drastic measures taken. If the Quinn group had gone down, then presumably the large number of companies with Quinn insurance could not have continued to trade, with chaos ensuing. For a similar reason, I presume, although on a larger scale, AIG was rescued.

Still not sure where the money came from to pay the Quinn losses though. This article :

irishtimes.com/newspaper/fin … 67851.html

implies the charge yogan refers to was temporary - from 9th July to the 28th July 2008. So Quinn was cash-strapped for about a month but then managed to find the cash (or something) to have the preference shares redeemed.

If memory serves me correctly then they were deemed on the cheap.

So Quinn was caught short for the money, borrowed (with conditions from Anglo), repaid within the month and then wrote down the loss in the group’s accounts :

irishtimes.com/newspaper/fro … 03340.html

But the writedowns so far are for only(!) 888million, not 2.5billion. If the OP report is correct, there is another 1.5billion yet to come out - presumably in this year’s accounts? Does the Quinn Group generate that kind of cash? in 2008, it only made 83million profit (once loans to the family had been written off)

The Quinn Group generates enormous amounts of cash.

I think some of the confusion stems from the initial reports was that Quinn had a 15% stake through CFDs. However it’s now accepted that it was 25%.

If there was 750m ordinary shares and Quinn’s weighted average purchase price was 14 euro, then Quinn’s gross exposure was 2.6bn. The taxpayer reduced Quinn’s exposure by c.500m (via maple 10), so Quinn’s loss would come in around 2.1bn ([750m1425%] – 500m).

Even lowering the weighted average purchase price to 10 euro (and same assumptions) you get a hit of 1.4bn.

I hope Quinn only indulged in Anglo stock. It appears to be the case, but I can’t help visualize a roulette table and Quinn placing chips on a couple of other numbers.

Sorry Jon, that isn’t a good enough explanation and to be honest it’s high time Irish business journalists got on top of this story.
In my opinion it absolutely stinks to high heaven.
Too often you guys take the answer given but frequently that answer is garbage.
Bertie Ahern is rightfully laughed at for saying he won 10’s of thousands on the nags but JP Mc Manus for instance is consistently taken completely at his word by many of your colleagues for claiming to have won zillions punting markets despite little or no evidence of it.

How can one man (even Sean Quinn) hand over €2.5 billion in a 12 month period in personal share losses and there is no trace of where he got it from?
The suspicion lingering is that Quinn may have vast loans outstanding to Anglo.
As a State owned bank, if these funds were used to fund his calamitous punting, then he should be forced to repay these funds immediately or else allow the State a share or control of his group.
He would be deemed to have borrowed money for a specific purpose (ie punting) and lost it, in which case that money is immediately repayable.
However the suspicion is that he is getting a soft ride because he is a large insurer, a big employer and hopefully will generate enough cash over time to pay back.

One way or the other Sean Quinn needs to make a very unambiguous statement as regards his/his company’s entire relationship with Anglo and what level of indebtness (if any) he still has to them.

  1. Did Sean Quinn used borrowed money from Anglo (or any other bank) to pay for his 2.5 billion punting loss?
  2. Is this amount fully or substantially still outstanding?
  3. If so, are the terms of the loans being adhered to?
  4. If not, what charges/security do Anglo/State have over Quinn?
  5. Why aren’t these charges being invoked if the cash is substantially gone via the punting?

Conversely if Sean Quinn can unequivocally demonstrate that he has no indebtness to Anglo and all his payments for his punting were discharged legally and cleanly (save for the stuff he got nailed by the Regulator for), then why wouldn’t he do this as it would only be beneficial for him and his business to remove such suspicions?

It’s not an explanation, it’s a fact. Everything you know about this story you learned from Irish journalists working under very challenging legal conditions.

Aha! … Ye olde:

That would imply that lots of information is known to journalists that can’t be printed.

The poster Max Headroom seemed to have a lot of info on this topic. Maybe he was just repeating what he read or is a journo but I think it is a bit of an exaggeration saying that everything that is known about this story is due to Irish journalists.

I don’t doubt it.

These are the Quinn divisions :
QUINN building products
QUINN chemicals
QUINN environmental
QUINN energy
QUINN glass
QUINN healthcare
QUINN hotels
QUINN Insurance
QUINN packaging
QUINN life
QUINN plastics
QUINN property
QUINN radiators

There quite a number of those - probably the majority - that can’t be doing too well, or at least not as well as in the construction boom years, and whilst the Insurance and Healthcare are probably doing well, wouldn’t the majority of the money they generate be ringfenced/invested cautiously for potential claims?

Is Quinn Group really doing so well that it can write off 2.5 bilion?

Are there any accounts online? I know it is a private company.

Well, known and speculated about are different things. Without being able to back it up publicly, it is speculation. Some of it is informed speculation, but nothing that you can put your finger on and say for sure…