Michael Noonan (Limerick City, Fine Gael)

The regulatory regime has improved significantly also.

It was very difficult to get anyone interested in buying the Quinn group. When it came down to the wire, only two companies had any interest in purchasing it. I understand from Anglo Irish Bank that it was a difficult negotiation. Liberty Mutual will take over the complete Republic of Ireland book, both assets and liabilities. It will assume liabilities of €51 million in excess of the assets to be transferred to it by Quinn Insurance Limited, QIL.

Liberty Mutual is making a contribution. When I spoke to the company's managing director recently, who is also a company shareholder, he told me any company guaranteeing jobs will say so for two years but that does not mean there will be no job losses after two years. He assured me his fullest intention was not only to trade but to expand the insurance footprint of Liberty Mutual in Ireland. Economic circumstances may change but there was no doubt about the security of the jobs, no more than there would be in any other company. Liberty Mutual has no intention of closing down the company at an early date. There would be no point in doing that anyway because the only value it has is to trade profitably.

Deputy Boyd Barrett said he found the arrangement concerning the bondholders complicated. I too find it complicated. However, I have a note which may help explain it better. The guarantees the bondholders have over Quinn property holdings are legally enforceable. If they were enforced, the joint administrators would only be able to realise about €40 million of the €464 million worth of property over which the guarantees are held. In this context, the deal struck with the bondholders through the involvement of Anglo Irish Bank has to be considered. The bank, by participating in this deal, is facilitating the lifting of guarantees valued at €464 million over assets held by Quinn Property Holdings assets, a subsidiary of Quinn Insurance Limited, held by banks and bondholders in return for a payment of €200 million. It should be noted these guarantees were the reason the Central Bank appointed the joint administrators in the first place, as the guarantees were held over assets which should have been available to cover QIL's insurance liabilities. This agreement releases value of €264 million to QIL which will reduce the call on the insurance compensation fund. Without this agreement, there would have been a considerable extra cost.

If this deal had not been done and instead of looking for the €700 million I referred to earlier, another €264 million would be required from the insurance compensation fund. It is a complicated but good deal. Thanks to all the rumours and publicity, Quinn Insurance lost business during the month of negotiations with Liberty Mutual Direct. Liberty will not find restoring that business or rebuilding confidence easy. The publicity and events impaired the brand. However, Liberty will go ahead, sign off on the deal in the High Court on 4 October and get down to business.

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