Oikocredit has launched first phase of new capital-raising model for existing investors in UK and Ireland
28 February 2023 Under the new model, Oikocredit will issue participations instead of shares. Investors in the United Kingdom and Ireland will see their existing investments transferred to the new model in two phases.
Until 2021, investors in the UK and Ireland were able to invest indirectly in OIKOCREDIT, Ecumenical Development Cooperative Society U.A. (Oikocredit) through Stichting Oikocredit International Share Foundation (OISF). OISF is a member of Oikocredit. It holds member shares in Oikocredit and issued depository receipts for those shares to investors in the UK and Ireland.
OISF ceased its offer in the UK and Ireland in 2021 but continues to serve existing investors. The introduction of the new capital-raising model will lead to changes for those existing investors. Oikocredit has introduced the first phase of this new model from 1 March 2023. New investments are unfortunately not possible.
First phase of changes effective 1 March 2023
Oikocredit is introducing this new model in a two-phased approach. In the first phase, with effect from 1 March 2023, the member shares held by OISF are converted by Oikocredit to participations. Participations are non-voting equity instruments and are materially similar in financial terms to the current member shares and depository receipts issued for member shares (for more details, see the table below). As a result, in March, the underlying product of all depository receipts held by existing investors in the UK and Ireland will become a participation instead of a member share.
In the second phase, as of 1 April 2023, all depository receipts will be exchanged for participations and all existing investors in the UK and Ireland will have a direct investment in Oikocredit. OISF will end the administration of investments in Oikocredit. It will eventually be liquidated and dissolved at a later date.
Investors don’t have to take any actions to exchange their depository receipts.
If investors disagree with the aforementioned changes, they can request a redemption of their investment. To request a redemption, investors should complete and return a redemption form (indvidual redemption form). Organisations can contact oi.support@oikocredit.org to request a redemption form.
New model expected to unify Oikocredit’s work and increase its impact
Participations will replace the shares issued by Oikocredit, the depository receipts issued by OISF for member shares it holds, and the other investment products that Oikocredit's support associations offer in other countries. This will allow Oikocredit to simplify its investment offer and enable it to use more resources in partnerships and projects that benefit low-income communities, and in promoting sustainable development together with its global network of investors, members and partners. Investors can read more about the new model in the comparison table below. Key documents describing this change, including the amended terms and conditions for OISF depository receipts, as well as the participation terms are now available.
Comparison of key features of the current depository receipts and the participations
|
|
Depository receipts (current product) |
Participations (new product) |
|
Issuer |
Stichting Oikocredit International Share Foundation (OISF), based in Amersfoort, the Netherlands. |
OIKOCREDIT, Ecumenical Development Cooperative Society U.A. (Oikocredit), based in Amersfoort, the Netherlands. |
|
Type of investment |
Non-voting depository receipt issued by OISF for a share issued by Oikocredit. |
Non-voting equity instrument issued by Oikocredit, called a ‘participation’. |
|
Redemption price |
Nominal value (EUR 200, GBP 200) or net asset value, whichever is lower. This means that the redemption price cannot exceed EUR 200 or GBP 200, but can be lower. |
Same as for depository receipts. It has been made explicit in the participation terms how the NAV in foreign currencies is calculated should the net asset value fall below the nominal value. |
|
Dividend |
As decided by Oikocredit’s members at the annual general meeting. Past dividend levels have included 2%, 1% and 0.5% (see recent dividend figures in the 5-year overview table in our annual report). There have also been years in which no dividend has been paid. |
Same as for depository receipts |
|
Costs for investment administration |
Allowed in principle, but none are in place. |
Allowed in principle, but none are in place. |
|
Risks of continuing to hold depository receipts |
An investment in depository receipts carries financial risks typical for an investment in the equity of a company. An investment is fundamentally associated with considerable risks and can lead to the complete loss of the invested capital. Oikocredit seeks to protect the capital of the investors through careful business decisions and diligent provisioning for expected losses, although a residual risk can never be completely ruled out. Since Oikocredit began in 1975, no investor has lost any of their capital. However, past performance is not a guarantee of future results. Please note that the depository receipts are no longer available for sale to, or subscription by, (prospective) investors in the UK and Ireland. For further information, click here. |
The risk profile is the same as for depository receipts. Please note that participations will not be available for sale to, or subscription by, (prospective) investors in the UK Ireland. |
|
Redemption |
You can submit a redemption order by filling in a redemption form at any time to request your money back. Redemption requests are processed on a monthly basis.
Investment redemptions are always at Oikocredit’s discretion. |
As is the case with depository receipts, you can submit a request for redemption, redemptions are processed on a monthly basis and are always at the discretion of Oikocredit. In addition, Oikocredit can also decide to redeem in case an investor no longer meets the eligibility requirements or holds less than one participation. |
|
Liability |
Investors’ liability is limited to the amount they have invested. This means an investment is subject to full loss, but investors cannot be held liable for debts of the cooperative beyond the amount they have invested. |
Same as for depository receipts. |
