Options for new co-op structure include reducing farmer share requirement.
Dairy co-op Fonterra has announced details of potential changes to its capital structure, including reducing requirement for farmers to own one share for each kg of milk solids they supply.
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Dairy giant Fonterra has laid out a range of options to strengthen its financial structure, but remains committed to co-operative ownership.
Chairperson Peter McBride says the capital structure review aimed to ensure the sustainability of the co-operative into the future.
Photo: RNZ / Rebekah Parsons-King
The country s biggest company said the aim was to balance farmer ownership, milk supply, and secure its financial future.
Among the options put out were dual share structures to allow outside involvement, splitting the co-op between supply and processing businesses, and different classes of shares.
Chairperson Peter McBride said the capital structure review aimed to ensure the sustainability of the co-operative into the future.
Dairy farmers have six months to decide on a capital restructure for Fonterra
Dairy farmers have six months to decide on a capital restructure for Fonterra 6 May 2021
Options include buying back the Fonterra Shareholders Fund, which has been capped in the meantime.
The co-op s chief financial officer, Marc Rivers, says the board will get feedback from farmers around the country from next week.
He says the aim is to decide on a preferred option that can be voted on at the Annual General Meeting in November.
Any restructure would require 75 percent support from farmers and unit holders and need a law change.
Thursday, 6 May 2021, 9:27 am
Today Fonterra is starting a consultation process to seek
farmer feedback on potential options to change its capital
structure that could give farmers greater financial
flexibility.
To allow its farmers to have open
conversations and consider all options during consultation,
the
Co-operative is temporarily capping the size of
the Fonterra Shareholders’ Fund (the Fund) by suspending
shares in the Fonterra Shareholders’ Market (FSM) from
being exchanged into units in the Fund.
This temporary
cap will be effective once the current trading halt is
lifted when the market opens tomorrow and will remain
throughout the consultation process.
Chairman Peter
Dairy farmers have six months to decide on a capital restructure for Fonterra
Dairy farmers have six months to decide on a capital restructure for Fonterra 6 May 2021
Options include buying back the Fonterra Shareholders Fund, which has been capped in the meantime.
The co-op s chief financial officer, Marc Rivers, says the board will get feedback from farmers around the country from next week.
He says the aim is to decide on a preferred option that can be voted on at the Annual General Meeting in November.
Any restructure would require 75 percent support from farmers and unit holders and need a law change.