Quinn Group Chairman Mike Mc Tighe could do with a win on the restructuring front, he had a big reputation but has taken a few hits recently particularly resigning from JJB Sports. Apparently he was appointed to Quinn by Strategic Value Partners (SVP) a shadowy hedge fund, they previously worked with the famous Murdoch Mc Killop and Paul O’Brien on IWP another instance when the guy who built the business was robbed of it. So they all have form but the word on the street is that Mc Tighe is a decent guy and had some success previously unlike O’Brien who sucks whatever blood he can from one business and moving onto the next before he’s found out.
The mis-management continues at pace and is accelerating as the panic to sell everything becomes actue, a few examples:
The CEVA deal
It was a case of whatever you want CEVA, originally they thought they’d get €5m for the trucks, now its down to €3m and falling. CEVA have every cost they incur underwritten plus 6%, no wonder they cam from Holland for this deal.
Neither O’Brien or any of those involved in this deal will be around to suffer its consequences for the business. CEVA have targeted a reduction of sixty lorries in the fleet, that’s 60 jobs, the remaining lorries will be moving all around Ireland and UK. There is no guarantee of same day service which Quinn customers have always enjoyed. The impact on the business will be huge but again who will be around to take responsibility.
Apparently on moving in CEVA threw a long term Quinn Manager out her office in an appalling fashion, just how much this behaviour is this community expected to tolerate.
The Rooftile Deal
Rooftiles is being sold apparently to protect jobs as Lagan’s factory is running at capacity. Lagan came in in December 2012, looked at the books and took all of profitable Rooftile customers, now he’s back for the factory. Apparently the CIS Senior Management Team objected to this deal but O’Brien over-ruled them, has his relationship with Lagan been reviewed? Can Lagan afford to pay for this factory? Apparently Banks have him under pressure to reduce his debt.
The Prestress closure
Apparently plans are advanced to close the Prestress facility, not due to the staff effort, productivity or production costs. It’s due to a Sales Representative employed in the UK who has committed the business to millions of pounds of loss making contracts. Everybody else in the industry knew this guy’s track record but he impressed O’Brien. This is just bad management and a lack of basic costing controls, but will cost the community 30 jobs.
Glass returns
For the past twelve months Glass returns from customers have been running at an all time high, including recent returns from Diageo. O’Brien has the business under enormous pressure to produce and despatch asap, this together with a huge reduction in stocks to save cash is beginning to manifest itself in quality problems creating a cycle that will be difficult to escape from.
There are numerous other examples so its not surprising that on an overall level EBITDA in the business has reduced by 50% since 2010, €112m down to €60m and continuing to fall in early 2014. The panic to sell is managements attempt to stay in a well paid job for as long as possible at the expense of whatever, or whoever.
The losers are our local community who are seeing jobs lost and the bondholders who are seeing their value disappear, with the performance and trends in the business it has no hope for repaying the €450m of debt secured on its assets.
It is time for those who care ie: the local community to come together with those who should care the bondholders and sort this out, Mike Mc Tighe can and should lead this process but firstly he needs to recognise that his management have lost control.
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