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Irish Search for Billionaire’s Assets Leads to Russia

April 3, 2013 by Leave a Comment

MOSCOW — The Irish government is promoting a partnership with one of Russia’s largest banks to help seize assets in the former Soviet Union belonging to Sean Quinn, a bankrupt Irish businessman who was once the country’s richest man.

The government-owned Irish Bank Resolution, which is trying to recoup losses from the collapse of the Quinn family’s real estate empire, has been working with Alfa Group, which is controlled by the billionaire Mikhail Fridman and other wealthy Russians.

The Irish hope to seize a dozen properties in Russia and Ukraine, Ireland’s ambassador to Russia, Philip McDonagh, said Wednesday at a news conference in Moscow.

Mr. McDonagh said Alfa Group, the conglomerate that recently exited a joint venture with BP in Russia, TNK-BP, would be “successful in asserting the claims over the properties in question for the benefit of the Irish state.”

Mr. Quinn, 65, is under investigation for avoiding payment of €2.8 billion, or $3.5 billion, in loans he owes to Irish Bank Resolution, formerly Anglo Irish Bank, which seized the Quinn Group Conglomerate in 2011.

His downfall, brought on by ruinous investments and the global financial crisis, came to personify the Irish economic collapse. Mr. Quinn declared bankruptcy and he, his son, and a nephew were jailed for contempt of court for hiding assets from the bank acting as a bankruptcy receiver.

The receiver has linked up with the asset recovery branch of Alfa Bank, called A1. Alfa Bank is known for its aggressive litigation in Russia’s civil arbitration courts in legal conflicts with BP and other Western businesses. Alfa’s suit against BP in 2011, for example, kept the British oil giant from joining a venture to explore the Arctic Ocean with Rosneft, the state oil company.

On Wednesday, Dmitry Vozianov, the acting director of A1, said of Mr. Quinn’s investments in Russia: “If we say we’re going to return the assets, then there is no doubt that we will get them.”

Directors of A1 said Wednesday that they would receive 25 percent to 30 percent of the value of any assets recovered under the agreement.

Representatives for A1 and the Irish bank said they were seeking to recoup as much as $500 million by seizing Quinn holdings including shopping malls in Moscow and Kiev and an office tower in Moscow.

Article source: http://www.nytimes.com/2013/04/04/business/global/irish-search-for-billionaires-assets-leads-to-russia.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Ireland to Liquidate Anglo Irish Bank

February 7, 2013 by Leave a Comment

An Anglo Irish Bank branch in Belfast, Northern Ireland.Peter Muhly/Agence France-Presse — Getty ImagesAn Anglo Irish Bank branch in Belfast, Northern Ireland.

LONDON – The Irish government passed emergency legislation on Thursday to liquidate Anglo Irish Bank, one of the country’s largest financial institutions.

The legislation, which was signed into law after an all-night parliamentary session, came after negotiations with the European Central Bank over swapping so-called promissory notes, which were used to bail out the Irish lender in 2009, for long-term government bonds.

The move is an effort to reduce Ireland’s debt repayments at a time when the country is still struggling under a cloud of austerity measures and meager economic growth.

The Irish Parliament rushed through the legislation to liquidate Anglo Irish, which was renamed Irish Bank Resolution Corporation after its failure and bailout, because details of the debt-restructuring plan leaked on Wednesday. Politicians had hoped to announce the deal after agreeing on new terms with the European Central Bank.

“I would have preferred to be introducing this bill in tandem with a finalized agreement with the European Central Bank,” the Irish finance minister, Michael Noonan, said in a statement.

The European Central Bank is considering the country’s latest proposals on Thursday, though European policy makers are concerned that a deal with Ireland could set a precedent for other indebted countries, like Spain, whose local banks also are facing mountains of debt.

As part of the deal to save Anglo Irish, Dublin injected more than 30 billion euros ($41 billion) into the local lender, of which around 28 billion euros is still outstanding.

The bailout has saddled the government with 3.1 billion euros in annual interest payments, or roughly the same amount Irish politicians have said they would cut in yearly government spending to reduce the country’s debt levels. The local government has been eager to reduce that multibillion-euro figure by swapping the high-interest debt into long-term government bonds that can be repaid over a longer period.

Ireland racked up huge debts in bailing out Anglo Irish and the rest of the country’s financial industry, eventually requiring a rescue package of 67.5 billion euros from the European Union and the International Monetary Fund in 2010. The authorities have demanded that Irish politicians slash government spending to reduce the country’s debt burden.

Confusion reigned on Thursday at Anglo Irish’s headquarters in Dublin, a day after employees were sent home early in preparation for the government-mandated liquidation.

Some staff members had returned to work, but the atmosphere remained tense, according to a person with direct knowledge of the matter, who spoke on condition of anonymity because he was not authorized to speak publicly.

“People have been told it’s business as usual, but it’s anything but that,” the person said.

The accounting firm KPMG has been appointed to oversee the liquidation.

Under the terms of the liquidation, Anglo Irish’s assets will be transferred to the National Asset Management Agency, the so-called bad bank set up by the government, or sold to outside investors.

Anglo Irish has been at the center of controversy since the beginning of the financial crisis. Three of its former executives, including its former chief executive, Sean FitzPatrick, are facing fraud charges in connection with loans that were improperly administered.

Article source: http://dealbook.nytimes.com/2013/02/07/ireland-to-liquidate-anglo-irish-bank/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Ahead of New Rules, Europe’s Banks Go on a Selling Spree

November 11, 2011 by Leave a Comment

Minh Uong

LONDON — Europe’s banking sector is ready for a shake-up as its largest financial institutions try to slim down their operations in response to the sovereign debt crisis.

Banco Santander, Deutsche Bank and others are trying to sell assets and loan portfolios to reduce their exposure to worrisome private and sovereign debt as part of a broad strategy to refocus on their home markets and comply with new regulatory requirements.

It is an extraordinary fire sale.

Europe’s financial sector is expected to sell or write down more than $1.8 trillion in loan assets in the next decade, according to the consulting firm PricewaterhouseCoopers. That compares with just $97 billion from 2003 to 2010.

“The list of asset sales is the longest I’ve seen in 10 years,” said Richard Thompson, a partner at PricewaterhouseCoopers in London, who added that the final figure could rise well above $1.8 trillion. “Banks want to reshape their balance sheets to focus on specific territories or sectors.”

Sales are already under way. Last week, Ireland’s nationalized Anglo Irish Bank sold $3.3 billion in commercial real estate loans in the United States to Wells Fargo. In all, the Irish bank wants to offload nearly $10 billion in American loans as part of a government requirement to reduce its assets and trim its operations.

In debt-ridden Spain, Banco Santander and BBVA, the country’s largest financial institutions, as well as a number of struggling savings banks are also lining up buyers for their loan portfolios. With home prices dropping 24 percent in the last four years, local banks that aggressively sold low-interest mortgages across the country are looking to reduce their real estate holdings.

With so many assets up for grabs, potential buyers with large reserves of capital are looking at potential bargains. Major private equity firms, including the Blackstone Group, Cerberus Capital Management and Apollo Global Management, are raising funds for distressed assets.

Cash-rich sovereign wealth funds have also been active. Last month, financial companies connected to the Qatar Investment Authority announced plans to acquire banking assets in Turkey and Luxembourg. The deals came after a $686 million investment in August from a fund controlled by the royal family of Qatar as part of the merger of Greece’s Alpha Bank and Eurobank.

For many struggling banks, sales cannot come quickly enough. Spain’s unemployment is 22.6 percent, the highest in the European Union. And the amount of nonperforming loans held by banks has increased by 36 percent since 2010, according to Citigroup analysts.

“Ireland and Spain have been the center of most of the activity in the last 12 months,” said Graham Martin, a partner at the consulting firm KPMG in London. “That’s now spreading to other European markets as banks look to reduce their exposure.”

Regulatory pressures are forcing financial institutions to dump risky assets, too. The European Banking Authority announced plans last month to compel banks to increase their core Tier 1 capital ratio, a measure of their ability to withstand financial shocks, to 9 percent by June 2012.

To meet the new requirements, authorities say Europe’s banks will need to raise $146 billion, either by selling assets or raising capital. That includes a combined $41 billion for struggling Greek banks.

New global banking standards, known as the Basel III, are also driving the deleveraging efforts.

Under the plans, which take effect in 2013, banks must meet new restrictions on the amount of money they are allowed to borrow and put aside extra capital reserves mostly from asset sales to offset potential future losses.

“The wave of new regulation will increase scrutiny on how banks operate,” said Larry Tabb, chief executive of advisory firm TABB Group in New York.

In the short-term, Mr. Thompson of PricewaterhouseCoopers says European banks are focused on reducing their multibillion-dollar loan books of commercial property and residential mortgages. To avoid criticism from politicians and the public for selling assets in their home markets, banks are prioritizing sales in foreign markets as they look to slim down their balance sheets.

Yet some big banks may also be buyers. With so many undercapitalized financial institutions looking to offload loan portfolios, Ralph Silva, director of the London-based financial consulting firm SRN, says solidly funded global banks could use the opportunity for expansion, particularly into emerging markets.

This year, Banco Santander, the largest bank by market capitalization among the 17 countries using the euro, bought the Polish bank Bank Zachodni WBK for $5.6 billion, while London-based HSBC is looking at the Turkish arm of the troubled French-Belgian bank Dexia.

“The major banks know there are good bargains out there,” Mr. Silva said. “But as long as the price keeps going down, they’ll hold off on buying until we reach the bottom of the market.”

Article source: http://feeds.nytimes.com/click.phdo?i=492fb155ca9e7ef6f1d3c874a2139f54

Filed Under: Business News Tagged With: , ,