WESTFORCE CREDIT UNION and FIRST CREDIT UNION INCORPORATED
WESTFORCE CREDIT UNION (“Westforce”) proposes to transfer its engagements (“Transfer of Engagements”) to FIRST CREDIT UNION INCORPORATED (“First”) in accordance with section 135(3) of the Friendly Societies and Credit Unions Act 1982 (“FSCU Act”).
Under the Transfer of Engagements, it is proposed that First will undertake to fulfil all engagements of Westforce, by succeeding to all of the assets, property, rights, powers, and privileges of Westforce, together with all liabilities and obligations of Westforce. The Transfer of Engagements is similar to a merger between Westforce and First.
The Transfer of Engagements has been proposed to a larger, more resilient credit union to secure the future of Westforce members and will create increased opportunities to deliver improved products and services in the future. First have a similar vision to continue to develop a strong, competitive and sustainable sector that delivers on its purpose of “people helping people” across New Zealand.
As a small financial entity, Westforce has been finding it difficult to compete due to relatively higher costs to meet and deliver services and, in recent years, the increased cost of compliance. For the past three years, Westforce’s financial position has been deteriorating and there is a likelihood of breaching its capital ratio in the short-term. This would most likely result in Westforce’s supervisor, Trustees Executors Limited, declaring an event of review under Westforce’s governing documents and requiring Westforce to take steps to improve its financial position including seeking out opportunities to transfer its engagements and ceasing to accept new members in the meantime. In a worst-case scenario, Westforce could have a receiver appointed over it. It is therefore important the transfer of engagements to First is successful.
It is proposed that members of Westforce will vote on the Transfer of Engagements at a Special Meeting called for 16 June 2022. If approved, the Transfer of Engagements will be subject to the further approval of the Board of First and will remain subject to other conditions.
If the Transfer of Engagements is approved by members of Westforce by way of special resolution and the Transfer of Engagements becomes unconditional, the special resolution will be filed with the Registrar of Friendly Societies and Credit Unions (“Registrar”) pursuant to sections 135C(1) and 82(3) of the FSCU Act. Under section 82(4) of the FSCU Act, a period of six weeks is then allowed for objections to be made in respect of the Transfer of Engagements.
Where you consider that you may be adversely affected by the Transfer of Engagements to a substantial extent or, where you are entitled to claim a benefit from Westforce and are dissatisfied with the provision made for that claim, you may object to the Transfer of Engagements pursuant to section 85 of the FSCU Act.
Objections may be made in writing to the Registrar at Private Bag 92061, Victoria Street West, Auckland 1142 within the six-week objection period or by email to compliance@companies.govt.nz. Any objection should be clearly stated and describe the remedy sought.
It is anticipated that the Transfer of Engagements will take effect on or around 1 August 2022.
The most recent Product Disclosure Statements and audited financial statements for Westforce and First may be obtained online by accessing the Disclose Register www.disclose-register.companiesoffice.govt.nz (using the “Search for an Offer” function).
Further information may be obtained by visiting https://www.westforce.org.nz or www.firstcreditunion.co.nz or by contacting executive@westforce.org.nz or welcome@firstcu.co.nz.