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Landlords speed up merger process by one year due to ‘economic uncertainty’
One Housing and Riverside have taken what they described “a precautionary measure” to accelerate their merger process due to the “economic uncertainty” facing the sector.
The decision to speed up the legal integration by the two associations was announced in a stock market update, which revealed they had begun a ‘transfer of engagements’.
The transfer is a legal mechanism that allows stocks and assets to be transferred from one organisation to another.
As part of this process, all assets and liabilities of One Housing will be transferred to Riverside. The transfer includes a £250m secured bond due in 2044.
G15 landlord One Housing officially became a part of Riverside Group on 1 December last year in a tie-up that created a 75,000-home association.
The merger initially announced that One Housing would remain a subsidiary of Riverside for two years before folding into the bigger organisation, with the enlarged association eventually having one executive team and board.
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However, in response to an enquiry about the stock market update, Riverside told Inside Housing that One Housing will become part of the group sooner than intended.
A spokesperson for Riverside said: “In December 2021, One Housing joined the Riverside Group as a subsidiary, with a view to full integration after two years.
“The housing sector has faced real challenges in the past few years, but with even more economic uncertainty, as a precautionary measure, the One Housing board initiated talks to accelerate legal integration.
“The Riverside board agreed with this approach and, as a result, One Housing will legally become part of Riverside one year earlier than initially intended.”
The landlord explained that it took the decision so it could provide additional protection to its customers and services under the financial resilience of Riverside.
The legal integration process is not expected to impact the association’s service delivery.
Riverside added: “As a result of the merger, we have already seen real benefits to the services and support we are able to offer to our customers. We have committed to invest £1bn in improving and repairing our homes over the next five years, with a focus on building and fire safety, warmer homes and regeneration.
“We have also set up a £2.5m fund to help support our customers through the cost of living crisis. We are only in a position to make these commitments because of the two organisations agreeing to come together to shield our customers and services as much as possible under the bolstered strength of the group.”
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