The documents proposing the transfer of Kent Reliance Building Society to a new company with Private Equity investment by JC Flowers have now been sent out.
I urge any member to read the document carefully. Although a complicated legal document it contains a number of very key points and some information that is critical to understand. Importantly read the section about Disadvantages listed by the Directors, the crucial ones being:
1) Loss of control of the bank by KRPS
2) KRPS shares will reduce so mutuality is no sustainable
Based on the information in the document we will be voting AGAINST the proposal.
The deal guarantees a return of 20% per year to JC Flowers
JC Flowers could potentially become the majority owner of the new bank very quickly
Mutuality is quoted but is effectively being given up to a private equity partner
More information about the KRBS Kent Reliance takeover is on the Rainham History website
3 comments:
Kent Reliance Building Society (previously named Chatham Reliance) has been a long standing mutual society serving, mostly, the Medway towns through its network of branches. In recent years the branch network has mostly disappeared as the business has concentrated on postal accounts, many of the back office duties have also transferred from Chatham to India. For many years I have held substantial deposits in the society, but seeing my interest gradually reduce to uncompetative levels decided to withdraw all, except a membership retaining balance, last year. Incidentally, at this time the CEO awarded himself an inflation busting pay rise.
Andy, I was pleased to see your posting as my views are exactly in line with yours. As I see it at conversion the KRBS members (i.e you and I) will have 26,000 shares against JCF holdings 17,246, giving us a majority share holding of 60.1%. However, JCF holdings will also own an additional 32,574 preference shares which are fully convertible to ordinary shares. If (or more likely when) they take up this option KRBS members will be left with a minority shareholding of just 34.2%, meaning that we can be out voted on any future proposals the investment bank my have. Rest assured that I will vote against the proposal in person at the special meeting on 19th November.
I have set up NO2KRBS on Facebook. Please tell all your friend and sign up.
Chris
After the latest news about the former KRBS owned One Savings Bank floating on the stock market it looks like all the predictions I made were true.
JC Flowers now own more than 99% of KRBS compared to only 40% when the members voted, just as I predicted and as was denied by KRBS at the time.
Nice to be vindicated!
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