Collapse of merger for debt-ridden credit union
The future of Charleville Credit Union hangs in the balance after the collapse of a rescue merger.
Central Bank regulators and the Irish League of Credit Unions (ILCU) had tried to broker a deal that would have seen the Munster lender taken over by financially stronger Clonmel in Tipperary.
But there was fierce opposition to the link-up from members of Clonmel, who had organised a public meeting opposing moves for their lender to take over Charleville, and had gathered sufficient signatures to demand the holding of a special general meeting.
Charleville has a historic problem with bad debts and needs funding of €4-5m from an ILCU rescue fund to shore up its balance sheet. Its reserves have been hit by a dramatic devaluation of its large premises in the town.
The abandonment of the controversial tie-up leaves the Co Cork credit union in a precarious position.
A source said attempts would now be made to see if another financially strong credit union was prepared to complete a rescue merger of Charleville.
An attempt may be made by the league to buy Charleville's offices as well as using the special protection fund (SPS) to boost the lender's reserves.
Sources in the movement insist Charleville is not insolvent.
"And there has been no fraud, or anything like what happened in Rush," he said in reference to the collapse of the Co Dublin lender last year.
The scrapping of the Clonmel-Charleville merger was confirmed in a joint statement by the two credit unions.
"Both boards were confident that a combined entity would have been in the best interest of all our members," it said.
"However, the two credit unions did not reach agreement on the finer details of a post-merged entity."