The boards of directors of the Fédération des caisses Desjardins du Québec and Caisse centrale Desjardins call special meetings for the amalgamation of these two entities
Lévis (Qc), October 27, 2016 - The boards of directors of the Fédération des caisses Desjardins du Québec and Caisse centrale Desjardins decided today to convene special general meetings on November 28 to submit to their members a proposal to amalgamate Caisse centrale with the Federation. Each of the meetings will be called to adopt an amalgamation by-law with a two-thirds majority of the votes cast.
If the proposal is adopted, the directors and management of the Federation and Caisse centrale expect the amalgamation to become effective January 1, 2017, subject to obtaining the necessary regulatory approvals, in particular the approval by the Autorité des marchés financiers.
The structure of Desjardins Group has evolved over time, and changes in the Federation's activities have gradually eliminated the advantages, particularly with regard to efficiency and economies of scale, justifying the creation and maintenance of Caisse centrale as a separate treasurer. With this amalgamation, all of the activities related to the issuance of securities of Desjardins Group will be combined under a single issuer, resulting in a significant reduction in efforts relating to financial disclosures.
The project is consistent with the anticipated revision of the Act Respecting Financial Services Cooperatives, which aims, among other things, to strengthen the financial solidarity within Desjardins Group. The combination of the Federation and Caisse centrale activities and balance sheets under a single entity will contribute to make the cooperative more integrated and simplified for its members, clients, investors and partners.
From the date of amalgamation, Caisse centrale will continue its existence within the Federation, which will:
• Enjoy all of the rights and be liable for all of the obligations of Caisse centrale, in addition to its own rights and obligations;
• Have the capacity and powers devolved to Caisse centrale pursuant to the Act;
• Become the issuer under Caisse centrale's debt issuance programs and honour any security issued;
• Be Caisse centrale's successor in dealings with clearing houses and payment associations; and
• Continue the Caisse centrale activities without interruption.
The directors and management of the Federation and Caisse centrale believe that no downgrade or withdrawal of the credit ratings of Caisse centrale and its issuance programs will result from the amalgamation. In short, they anticipate the amalgamation will have no material adverse impact on the activities of these two entities.
For these reasons, the directors and management believe the amalgamation to be in the best interest of the amalgamating entities, and of Desjardins Group as a whole. The boards of directors of the two entities therefore recommend that delegates of their members vote in favour of the amalgamation project.
Retirement of the General Manager of Caisse centrale
The General Manager of Caisse centrale, L. Daniel Gauvin, has announced his decision to take on new challenges and retire from Desjardins Group after a career that has spanned over 20 years with the cooperative financial group.
The management of Desjardins Group acknowledges his expertise in financial market dynamics and risk management, and applauds his tireless promotion of Desjardins on the Canadian and international financial stages. Mr. Gauvin plans to leave his position as of the amalgamation date.
Caution concerning forward-looking statements
Certain statements made in this press release may be forward-looking. By their very nature, forward-looking statements involve assumptions, uncertainties and inherent risks, both general and specific. It is therefore possible that, due to a number of factors, the predictions, projections or other forward looking statements as well as Desjardins Group's objectives and priorities may not materialize or may prove to be inaccurate and that actual results differ materially. Various factors that are beyond Desjardins Group's control, and therefore whose impacts on Desjardins Group are difficult to predict, could influence the accuracy of the forward looking statements in this press release. Although Desjardins Group believes that the expectations expressed in these forward-looking statements are reasonable, it can give no assurance or guarantee that these expectations will prove to be correct. Desjardins Group cautions readers against placing undue reliance on forward looking statements when making decisions. Desjardins Group does not undertake to update any written or verbal forward looking statements that could be made from time to time by or on behalf of Desjardins Group, except as required under applicable securities legislation.