CREDITORS OF Quinn Group yesterday approved a proposal to restructure the troubled manufacturing and financial services group’s debts that will cut €800 million from the liabilities of its manufacturing business.
The terms of the deal were hammered out early last month and voted on by creditors such as Strategic Value Partners and Silver Point Capital, and banks Barclays, KBC and Danske yesterday.
Yesterday’s statement from the group said the creditors approved its restructuring proposals.
The company said the restructuring will see its manufacturing group permanently relieved of more than €800 million of debt. It will cut the group’s annual interest bill to €40 million from €60 million.
It added that the vote would pave the way for the sale of the Quinn Insurance business to a joint venture between Anglo Irish Bank and Liberty Mutual. This is expected to be completed in the near future.
Quinn Group chief executive Paul O’Brien said the deal would provide funding and stability for the future. “The group remains profitable at the operating level, but simply could not sustain the level of debt taken on in the past.
“By permanently removing over €800 million of that debt burden, the manufacturing businesses have been placed on a sound financial footing,” Mr O’Brien added.
The Quinn Group is the industrial conglomerate formerly owned by Seán Quinn and his family.
The group owes €1.3 billion to banks and bondholders, while Anglo Irish is owed almost €2.9 billion by the Quinn family.
In September, the group’s management cut projected earnings for 2011 to €85 million from the previous management’s estimate of €115 million, blaming difficult trading conditions.
As a result, it said the interest payments agreed in the original restructuring earlier this year were unsustainable.
