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Markets News Afternoon: Quinn Group appoints financial restructuring firm; NAMA chief says some incomplete projects may be demolished
By Finfacts Team
Apr 13, 2010 - 5:22:02 PM
Minister for Agriculture Brendan Smith feeding sheep in Edenderry, Co. Offaly, April 07, 2010
Talbot Hughes McKillop LLP (THM) has been engaged by the Quinn Group to provide financial restructuring services to the company. In addition, THM Partner Murdoch McKillop has been appointed as an interim executive director of Quinn Group Ltd.
The Chief Executive of Quinn Group, Liam McCaffrey, said today: “Mr McKillop’s role will be to assist the board and the executive management team to successfully work through the Group’s current issues and to ensure that executive management are not excessively diverted from the vitally important job of running our manufacturing business.”
The Quinn Group is seeking to prevent loss of control of its insurance division because of claims by the Financial Regulator of of serious breaches of regulatory procedures at Quinn Insurance Limited. The High Court will hear an application from the regulator next Monday for the removal of control of the insurance division from the Quinn Group. The loss of the insurance business would put the whole group at risk.
Corporate and personal debts to lenders amount to €4bn.
NAMA: The chief executive of the State toxic property loans agency, the National Asset Management Agency (NAMA), today told an Oireachtas committee the agency will 'inevitably' be faced with the prospect of knocking down certain developments.
Brendan McDonagh told the Oireachtas Joint Committee on Finance and Public Service that the agency would take a 'strictly commercial view' of unfinished building projects, and would not give funding to complete them for the sake of it.
McDonagh said it was now estimated that a third of the loans it was taking on were producing cash in some form, compared with an initial estimate of 40%. He also said the agency had already had face-to-face meetings with borrowers whose loans had been transferred from the banks and added that NAMA would not be 'rolling over' interest for borrowers in future. McDonagh said around 12.5% of NAMA's total portfolio was on interest roll-up.
"We will not waste time with borrowers who do not wish to co-operate or who have not yet accommodated themselves to the current realities of the property market,"he said.
NAMA has paid €8.5bn for loans with an original value of €16bn and McDonagh said work was now underway on the transfer of the next batch of loans, worth €13bn, which are due to be transferred in the second quarter of this year.
He said he hoped to have all loans from three of the five financial institutions completed by the third quarter of the year. Asked about the delay in transferring the first loans from Anglo, he said the process had been 'long and difficult' and he expected it to be completed in the coming weeks.
McDonagh said that what the agency had found in banks - - including poor loan documentation, assets not properly secured and inadequate stress-testing - - was due to a 'mindless scramble' to funnel lending into one sector of the economy.
Discussing the latest forecasts for the US economy and declining small business optimism, with Jan Hatzius Goldman Sachs chief U.S. economist:
Greece: An auction by Greece today of bonds showed an improved interest from investors after last Sunday's clarification from the Eurogroup of Eurozone finance ministers of cash support of €45bn if needed, with one-third coming from the International Monetary Fund.
The government raised €780 million of 26-week bills at a yield of 4.55% attracting bids for 7.67 times the securities offered, the country's Public Debt Management Agency said today in Athens.
The UK political party that manages to put forward a viable plan to cut the country's public deficit will win the next general election, David Kuo from The Motley Fool told CNBC Tuesday:
US markets
On Monday, the Dow has has dipped 16 points or 0.14% to 10,990.
The S&P 500 has dipped 0.40% and the Nasdaq Composite has fallen 0.19%.
On the New York Mercantile Exchange, oil for May 2010 delivery is trading at $83.96 down $1.38 from Monday's close. In London, Brent crude for May delivery is trading at $83.95 a barrel.
Prices fell after the International Energy Agency (IEA), the Paris-based energy watchdog of 28 developed countries including Ireland, warned today about potential risks to the economic recovery posed by high energy costs.
For live currency updates, check the right-hand column of the Finfacts home page. The dollar traded at a record low $1.6038 per euro on July 15, 2008.
There is no political resolution in sight for Thailand, notes Michael Vatikiotis, visiting fellow at Institute of Southeast Asian Studies. However, he tells CNBC's Chloe Cho that there may be some sort of compromise to ease the tension.
