meta Fonterra’s planned capital reorganisation has been approved. :: The Bullvine - The Dairy Information You Want To Know When You Need It

Fonterra’s planned capital reorganisation has been approved.

The co-op, which is made up of about 10,000 farmers, wanted to change its capital structure so that farmers would only need to own one share for every three kilogrammes of milk solids instead of one share per kilogramme.

With the new structure, different types of farmers would be able to own shares in the company, and the size of the associated shareholders’ fund would be limited to 10 percent of all shares on issue.

The changes are meant to protect the company’s finances and keep farmers on board in the face of a possible drop in milk supply and competition from other milk processors that don’t need farmers to put up capital.

Last night, Parliament passed the third reading of a change to the Dairy Industry Restructuring Act that was needed for the restructuring to happen.

Peter McBride, the chairman of Fonterra, said that the passing of the bill gave farmer owners the clarity they had been looking for and meant that the business could move forward with putting in place the flexible shareholding capital structure at the end of March 2023.

He said that the decision was made based on a number of things.

“We think late March is the best time to start because it avoids the time when we can’t trade shares because of the co-interim op’s results.

“It also gives shareholders time to fully understand the detailed information we’ll send them before the change goes into effect and to talk to their financial advisors,” the company said.

Fonterra plans to announce the final date of implementation along with its interim results on March 16, 2023.

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