Kent Reliance to transfer funds to OneSavings
Kent Reliance members have backed a transfer of the building society’s business, assets and liabilities to OneSavings.
It forms the next stage of its partnership with private equity firm JC Flowers, which will inject £50m into OneSavings through fund subsidiary OSB Holdco once the transfer has been approved by the FSA.
Under the new structure, members of the society will join Kent Reliance Provident Society which will own a 59.9 per cent stake in OneSavings while OSB Holdco will take 40.1 per cent of ordinary shares.
Members will no longer be part of Kent Reliance Building Society, which will cease to exist as a legal entity when the transfer takes effect. It is expected to go through by February 2011. The transfer was backed at the society’s special general meeting last Friday when 75.8 per cent of eligible shareholding members voted in favour of the proposal, and 80.15 per cent of borrowing members supported the proposal.
KRBS will now apply to the FSA for the transfer to be confirmed. A statement said: “This transfer is part of wider proposals for a new structure for society’s business and will allow for substantial capital investment to support the business and enable future growth.”
Malcolm McCaig, chairman of KRBS, said: “Our joint venture with JC Flowers will mark the beginning of an important new chapter in the history of the society and will give us a strengthened capital base.”
David Morgan, managing director Europe and Asia Pacific for JC Flowers, said: “We look forward to joining forces with KRBS. The injection of new capital will make the business stronger and able to take advantage of opportunities.”
Kent Reliance was founded in 1887 and has four branches as well as three agency buildings. It has assets of £2.2bn and 180,000 members. The society has built the business on outsourcing back-office functions – known as Easiprocess – where it has bases in Pune and Bangalore in India.
It also provides services to a Jamaica-based mutual building society and telephone support for a Sharia-compliant cash card, operated in conjunction with MasterCard. At one stage Kent Reliance considered moving its headquarters to Wales and becoming an internet-only building society in a bid to reduce costs.
David Brunning, director of Kent-based IFA Brunning Newman Houghton, said: “It is disappointing that the building society sector and the mutual aspects continue to be eroded. I think these types of business continue to have a place and are generally among the most trusted organisations.”