(The full policy can be downloaded HERE)
AIM OF THE POLICY
To minimise the cost of capital by the LCG Board using its surplus cash to re-purchase members’ shares
IMPLEMENTATION OF THE POLICY
1. The LCG Board will set an annual target range for the share repayment at the same time it considers: the interest rate payment; the Community Benefit Fund grant; alternative capital finance; and capital requirements of the new project pipeline (normally at the May Board meeting).
2. The working assumption is that all available cash beyond the agreed working cash float (reviewed annually) will be used to repay members’ share capital.
3. This target range for share repayment will be announced at the AGM along with the interest rate payment and proposed Community Benefit Fund grant.
4. The LCG Board will then notify all members of the share repayment target range and interested parties asked to respond to the LCG Society Secretary by a given deadline, making it clear that this is the annual deadline to apply to withdraw shares. This initial request is to come direct to LCG.
5. Following the deadline, the LCG Board will review all withdrawal requests against the set target range
6. If the aggregated withdrawal requests are less than the maximum target sum available, the LCG Board will:
- repay the applicant members in full
- inform all members of the shortfall and the likely impact on future interest rates
- consider how the excess cash can be most effectively used
7. If the aggregated withdrawal requests are more than the maximum target sum available, the LCG Board will:
- in the first instance consider the viability of increasing the cash sum available to meet the demand through other sources of finance so that applicant members receive the full amount of their holding
- decide that a shortfall of cash to meet the demand is unavoidable and repay all the applicant members a percentage of their total holding so that the available cash is apportioned pro rata.
In order to settle the outstanding balance, these applicant members will be given priority in the following years process
- inform all members of the outcome of this process
8. In addition to this annual withdrawal request process, the LCG Board will give special consideration to requests for repayment in order to settle the estate of a member following their death and in other cases of hardship throughout the year.
- provided the annual maximum target has not been met, the LCG Board will consider such requests on a first come first served basis. Approval will then be considered on merit and those that are not approved will be given priority in the following year’s process
- once the maximum repayment target has been met, the LCG Board will inform applicant members that they will be given priority in the following year’s process
9. The LCG Society Secretary will notify:
- applicant members of the LCG Board decision and provide share withdrawal forms to be returned along with the share certificate directly to the share registry
- the share registry by way of emailed minutes authorising the share withdrawals with breakdown of the payment details in each case.
10. The share registry will check the share withdrawal forms against the LCG minutes and breakdown and then, once confirmed, will instruct LCG to make the payments. LCG will communicate with the member at this point regarding the bank account into which the payment should be made.
11. The share registry will issue replacement share certificates to the members where appropriate.
12. Members will be paid interest at the next time for interest payments for the period for which they have held shares.
Agreed by the board 21st July 2018