108Deposits, debentures or CCUs instead of payment when share repurchased

108 Deposits, debentures or CCUs instead of payment when share repurchased

(1) If a co-operative repurchases a share of a member, the co-operative may instead of paying the purchase price to the member:

(a) for a deposit-taking co-operative—apply the amount as an interest-bearing deposit by the member with the co-operative; or

(b) allot or issue debentures or CCUs of the co-operative to the member in satisfaction of the amount.

(2) Subsection (1) applies only if:

(a) the board considers payment of the repurchase price would adversely affect the financial position of the co-operative; or

(b) the board and the member so agree.

(3) The deposit, debenture or CCU bears interest during any period:

(i) at the rate (or, if there is more than one rate, at the higher or highest rate) of dividend payable for that period on the share capital of the co-operative; or

(ii) if the rate of dividend payable for that period has not been decided—at the rate (or the higher or highest rate) payable for the immediately preceding period for which a rate has been decided; or

(iii) if a rate of dividend has never been decided for the share capital of the co-operative—at the rate the board of the co-operative considers reasonable; or

(b) for a co-operative without share capital—at the rate the board of the co-operative considers reasonable; or

(c) if the rules of the co-operative provide for a rate to be payable that is higher than the rate applicable under paragraph (a) or (b)—at the higher rate.

(4) The deposit, debenture or CCU must be repaid to the member as soon as repayment would not, in the opinion of the board, adversely affect the financial position of the co-operative.

(5) The deposit, debenture or CCU must in any case be repaid within 10 years (or within any shorter period the rules of the co-operative require) after the repurchase of the shares concerned.