DUBLIN, April 14, Reuters) – administrators to Quinn insurance group in Ireland have chosen liberty mutual LBRTML.UL, a leading insurer in the United States, as the preferred bidder for the group, the Government said Thursday.
Quinn insurance entered into administration in March 2010 after the financial regulator expressed concern about the ability of a company to cover liabilities, although the Manager has said it is profitable to a functional level.
The company is a major debtor of scandal-hit Anglo Irish Bank [ANGIB.UL], which will retain a minority holding in the new company.
But nationalised Anglo, which is in the process of being wound down over the years, we have no relations day management.
"The sale of insurance Quinn nears completion with the consortium between mutual freedom and Anglo are identified by the joint administrators as the preferred bidder," Finance Minister Michael Noonan said in a statement.
"This is subject to regulatory approval and completion of the contract details," he said, adding that all 1,500 jobs in insurance Quinn will be retained in the deal.
Sean Quinn, the founder of Quinn insurance and once richest person in Ireland will have no role in the new company, the statement said.
Proprietary Quinn Group, which owns the insurance business, but also glass, manufacture and packaging operations, entered into administration after building debts 2,8 billion euro (US $ 3.6 billion) for the Irish Anglo.
It suffered until the debt is mainly due to purchase of Sean Quinn of the participation of more than 20% in the Irish Anglo through contracts for difference, allowing a pound for a security without owning directly.
The investment was done without value, when the Government nationalised Anglo in early 2009 to save it from collapse after years of reckless lending property developers.
Before the nationalisation of Anglo, Quinn had offloaded half the bet on 10 major clients of the Bank. Anglo loan clients of the funds to buy shares in a transaction which is now under investigation by Director of Corporate Enforcement in Ireland.
The decision to put Quinn in command against political pressure was seen as a sign of better regulation in Ireland after years of lax supervision of banks which led to the collapse of the banking system.