Key Post - Predicting the date of Irish Nationwide demutualisation

Brendan Burgess

Founder
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Updated 18 June 2006 after publication of the Bill
Updated 9 July 2006 after the passing of the Bill.
Updated 16 October 2006
Updated 18 January 2007

I have no idea what is happening. Everyone assumed that it would be done and dusted by now, but very little seems to be happening on the surface. They are doing a sellers' due diligence and that may have come up with some major skeleton. I have reported what I believe to be systematic overcharging to the Financial Regulator. If they are investigating this, it could take a long time to investigate, sort out and refund to customers.

I am now guessing, and it is only a guess, that the D Day for qualification is September 2007.

Brendan
This is the sequence of events which must happen for the Society to demutualise. The timescales are my earliest estimates.


Step 1 The Society must design a conversion scheme and find a buyer - Say August 2006
As of October they are getting presentations from stockbrokers to appoint advisors on the scheme. Nothing else seem to have happened.

Step 2 The buyer must complete a due diligence - Say September 2006 Say December 2006

Step 3 The Financial Regulator must approve the scheme - Say October 2006 February 2007

D day for qualification is probably around February 2005 . The Society can then announce the scheme to the members. If you opened your account or took out your mortgage before February 2005, you should qualify.

Step 4 The members must meet to approve the takeover. Say November 2006. March 2007

Step 5 The Financial Regulator must approve the scheme. Members could object.

Step 6 Members have 30 days to appeal to the High Court - December 2006 April 2007

Step 7 Cheques will be issued January 2007. May 2007




Brendan
 
6 Months Notice requirement
Rita (#12) under the title " makes the following submission ....

"First of all the Dáil must pass the legislation to allow another financial institution to buy the Irish Nationwide. Then potential buyers will want to conduct an investigation of the society’s books. Then, the Irish Nationwide will have to give the Central Bank 6 months notice of its intention to demutualise. Then the conversion proposal will have to be put to members in a vote, and the members will have to approve the proposal. Then the High Court will have to approve if any members object."


Can anyone confirm whether this 6 months notice must be given prior to the issue of notice of resolution to savers to demutualise. If so then its a help towards reaching the 2 year requirement for holding a qualifying savings account in the Society.
 
Section 101(4) of the Building Societies Act:


So if Fingleton has a buyer and scheme ready to go, he must tell IFSRA now that he intends to have the general meeting on 10 January next.

But I don't think that there is anything which prevents IFSRA from approving the scheme a lot quicker. My guess is that they just want this headache out of the way and will rubber stamp the conversion scheme as long as it complies with the Act. If it is completely outrageous they will ask Fingleton to make it fairer, but he is under no obligation to do so. All they can do is to hold back approving it for 5 months, which is probably what they would do.

Brendan
 
Trier said:
Can anyone confirm whether this 6 months notice must be given prior to the issue of notice of resolution to savers to demutualise. If so then its a help towards reaching the 2 year requirement for holding a qualifying savings account in the Society.
Click to expand...
INBS gave the Central bank notice of their intention to demutualise in June 2004 following the passing of a members resolution which instructed them to do exactly that.

In theory, the Regulator could withold approval indefinitely, right?
 
The above timescale is my estimate of the earliest possible times. The fact that they are not adhering to this does not mean that they are behind schedule.

They are apparently just appointing advisors now and so are months away from making an announcement. We won't know until the announcement is made. I suspect at this stage that someone who drew down their mortgage in October 2004 is OK. I can't see it happening before October 2006. It might happen before December 2006, but unlikely.
 
In the meantime people who reaching the end of their mortgages and clearing their loans slip out of the DM net?
 
This thread is for predicting the timescale of the Irish Nationwide demutualisation.

Any "Do I qualify questions" or other off topic questions will be deleted

Brendan
 
mary jane said:
hello, could you tell me when is the next meeting on selling nationwide.or is it ever going to happen.thank you.
Click to expand...
The next AGM should be sometime before the end of April 2007, unless of course, it has converted into a bank before then, in which case there would have to be an earlier meeting to approve the conversion scheme.

If you're not happy with the delays, get onto Head Office and let them know.
 
This thread is about predicting the date of the Irish Nationwide. I have deleted all posts which are off topic.

Brendan
 
Updated 18 January 2007

I have no idea what is happening. Everyone assumed that it would be done and dusted by now, but very little seems to be happening on the surface. They are doing a sellers' due diligence and that may have come up with some major skeleton. I have reported what I believe to be systematic overcharging to the Financial Regulator. If they are investigating this, it could take a long time to investigate, sort out and refund to customers.

I am now guessing, and it is only a guess, that the D Day for qualification is September 2007.

Brendan
 
some comments:

They Sunday Indo published in early December that "firm news would be announced at the AGM at end January".

last years AGM was April and I cannot see audited accounts etc being available by end Jan and presumably as members we would have received notice of an AGM by now - not sure why the Indo said this.

Still, maybe the application to demutualise via a trade sale will be accepted by IFSRA / Central Bank in end Jan - this would then be the key date.

As regards Vendor Due Diligence, apparently they have appointed their auditors to perform this (I would have thought a different firm might have given it more credibility as in effect KPMG are to some extent auditing their own work), but I dont know if this has been completed and circulated to interested parties.

If as suggested their could be a systematic systems error, this would be problematic and would possibly mean a full scale systems/ IT audit. It could delay matters as a purchaser would indeed need to know the full scale of the problem. Unlike the sale of, say, a private company where part of the proceeds can be held in escrow against future claims that cannot happen here.

There is of course always plan B - simply demutualise and float. I would imagine this will be back on the agenda if a purchaser cannot be found by say March
 
The point re "skeletons" is valid,as could simply the fact that there isnt a line of bankers banging on the door of Nationwide House to aquire INBS.
It will take one entity to show its hand first before a true timeframe will become clear.
 
Piece from todays Irish Independent below-Brendan your timeframe of September 2007 looks accurate

"whole process has moved along much more slowly than people had first anticipated, to the point that there is likely to be a head of steam built up in time for the agm unless progress is seen to be being made.
Offer
Institutions preparing to offer themselves for sale do not always opt for a vendor due diligence.
It would be more normal to negotiate with prospective purchasers or strategic partners, allowing them then to carry out their own due diligence before completing a deal.
But it is felt that the Irish Nationwide, having failed initially to attract a really keen suitor, opted for this process as a means of eliminating "tyre kickers" - competing institutions only really interested in having a look at the business and make-up of its loan books but who do not harbour serious interest in acquiring the lender. "
 

Does this mean that anyone who opens a qualifying account between now and September 2007 (assuming that turns out to be the time) would qualify or that the two year expiry period must be over before then?
 
Last edited:
kilteragh said:
Does this mean that anyone who opens a qualifying account between now and September 2007 (assuming that turns out to be the time) would qualify or that the two year expiry period must be over before then?
Click to expand...
Brendan is thinking that the two year period must be over before then. But, given the drawn-out nature of this process, it could be much longer. Or the members could get sense and take back the Society, throwing Fingers and his pals out.....sorry, just dreaming.
 
Think Brendan meant D Day is September 2007 for an announcement but that D Day for qualifying for a pay out, at the earliest is September 2005.

My accounts 2 year period came into existance this week, so i'm a bit happier now!!
 
Hi

From the looks of things, this could run on for years yet - lets face it:

* Mr. F does not appear to be in any hurry, or if he is, he is doing a great job of keeping it a secret

* If the Financial Regulator is investigating the INBS, then it's highly unlikely that any sale would be concluded before this date (without significant guarantees which, from "ordinary" people might not be considered to have any value etc)

* The value of Banks is shifting a lot and with interest rate movements likely to hamper future levels of borrowing, risks apparent elsewhere in the world in the "sub prime" market etc etc it's not necessarily the best time for INBS to be sold is it ?

* This "sellers' due diligence" does not give possible purchasers a lot of comfort, given it's being conducted by INBS and it's representatives rather than those appointed by a would be purchaser etc.

If I had funds in the INBS now and was part of the way through the initial 2-year period, I'd certainly be taking a bet and leaving them there for the moment. Not sure if I'd go in from scratch at this stage though ...

Cheers

G>
 
Hi G

I must say that the likely day is getting further and further away. I told some people almost two years ago that it was very unlikely that they would qualify but they had very little to lose. They are now coming up the two years and delighted that they opened the account.

My understanding is that the Irish Nationwide has not yet appointed advisors, so the sales process has not even begun. I suspect that there must be something happening which is stopping them looking for a buyer.

The Annual Report will be out in the next two weeks and it will be interesting to see what the Chair says about it then.

The AGM will be at the end of April as usual.

Brendan
 
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