View from Dublin: more mega­phone diplo­macy from Sean Quinn and fam­ily as fight con­tin­ues

Belfast Telegraph - Business Telegraph - - Economy Watch - BY RICHARD CUR­RAN

SEAN Quinn is back. Well, back talk­ing to ral­lies of lo­cal sup­port­ers, that is. The for­mer bil­lion­aire told a gath­er­ing of sev­eral hun­dred last Tues­day night that he wanted to buy back his for­mer busi­nesses.

He said he could have raised the fi­nances, but has not been able to do a deal un­der agree­ments reached be­tween the cur­rent share­hold­ers. His claim that he had been “stabbed in the back” by his for­mer com­pany, im­plies he had be­lieved he would be able to buy back at least some of the eq­uity in the busi­ness.

Quinn In­dus­trial Hold­ings (QIH) owns the plas­tics, ce­ment and pack­ag­ing busi­ness of the for­mer Quinn Group. The own­ers bought these units for €98m nearly four years ago.

QIH is 88% owned by US hedge funds Brigade Cap­i­tal, Con­trar­ian Cap­i­tal and Sil­ver Point. The re­main­ing 22% is owned by a group of lo­cal busi­ness­men and for­mer Quinn Group man­age­ment.

The Amer­i­cans hold the ‘A’ vot­ing shares and the oth­ers hold non-vot­ing ‘B’ shares. Any chance Quinn be­lieved he had of buy­ing out the Ir­ish share­hold­ers was com­pletely nailed down by the share­hold­ers’ agree­ment. The rules are com­pletely wa­ter­tight and spec­ify that if one of the B share own­ers trans­fers his shares to an out­sider, all of the other man­agers are legally obliged to in­form the US in­vestors as soon as they be­come aware of it.

If such a trans­fer hap­pens, it can trig­ger the com­pul­sory pur­chase of that per­son’s shares by the US in­vestors for a nom­i­nal sum. The US in­vestors are sit­ting pretty as they bought the busi­nesses at a bar­gain price.

They are grow­ing prof­its and are col­lect­ing 10% in­ter­est on the money they have lent the com­pany. This amounted to €16m in the first two years. Hedge funds are al­ways will­ing to sell, but only for the right price. If Quinn wants to buy, he and the fam­ily will have to write a very big cheque. Mind you, I still wouldn’t bet against the fam­ily re­turn­ing to the busi­ness.

Mean­while, the Quinns are pre­par­ing to ramp things up ahead of their le­gal ac­tions against IBRC and the state. Ex­pect more mega­phone diplo­macy.

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