Victoria Mutual Building Society to undertake restructuring exercise | Loop Jamaica

The content originally appeared on: Jamaica News | Loop News

The Victoria Mutual Building Society (VM Building Society) has been given the green light to proceed with its restructuring plan.

The restructuring plan is proposed to be implemented by way of a court-sanctioned Scheme of Arrangement under the Companies Act, 2004, the Banking Services Act and its conversion to a proprietary building society.

This will be done by establishing a new financial holding company (FHC) which will hold all the financial services companies within the VM Group, and a non-financial holding company (Non-FHC) which will hold all the non-financial companies within the VM Group.

The FHC and non-FHC will both be held by a Mutual Holding Company (MHC) as the ultimate parent company of the VM Group. The MHC will be known as ‘VM Group Limited’, and the FHC will be called ‘VM Financial Group Limited’.

The VM Group comprises a range of companies which provide financial services, including deposit-taking and loan businesses through its building society; insurance business; remittance services; pension management; securities and wealth management services.

It is proposed that these entities, including VM Building Society, will be held under the FHC, VM Financial Group Limited, to be established by the VM Group.

Meanwhile, all non-financial service companies like VM Property Services Limited will be held under the Non-FHC.

To achieve the objectives of the group restructuring, the ownership of the VM Building Society will be transferred to VM Financial Group Limited.

The Board of VM Building Society wishes to maintain the concept of mutual ownership of the VM Group by the current members of the VM Building Society. This will be achieved by establishing the MHC, VM Group Limited, which, as the ultimate parent company of the VM Group, will be owned by the current (and future) members of the VM Building Society.

Michael McMorris, chairman of VM Building Society said: “The board has approved the development of this updated corporate structure in order to preserve the rights and legacy of our members with a robust holding company arrangement.”

“The VM Group will remain a mutual and give its subsidiaries the structure to dynamically meet the evolving needs of our customers, our drive to thrive in the global financial marketplace, and the imperatives of the Banking Services Act, which guides the operations of the VM Group,” he added.

The VM Building Society needs the approval of its members to implement the conversion. As a part of this, it will initiate a court-ordered Scheme of Arrangement, per the Banking Services Act and the Companies Act, 2004, to restructure the VM Group and convert the VM Building Society to a proprietary building society.

Completion of the proposed changes is conditional upon the Scheme of Arrangement being approved by the requisite majority of the members of VM Building Society as prescribed under the Companies Act, 2004 and approved and sanctioned by the Supreme Court of Jamaica.

In keeping with its strategic goal to be a ‘modern mutual’, the group restructuring will enhance the business’ ability to raise capital and fund its growth targets, ultimately benefitting members.