NZPA

Fonterra capital restructure vote to go ahead

Thursday October 22, 08:52 PM

A vote by Fonterra's 10,700 farmer shareholders on a capital restructuring will go ahead at next month's annual meeting, the giant dairy co-operative confirmed today.

Chairman Sir Henry van der Heyden said directors were pleased with the strong attendance and feedback from shareholders at 77 meetings around the country on the proposal.

"We had a record turnout of 3500 farmers at the meetings. We're encouraged so many farmers attended to give us their views," Sir Henry said.

Directors had listened to the shareholders' feedback which had "generally been supportive".

Fonterra would be making some changes to the first step -- strengthening the share structure -- of the three-step proposal. A detailed proposal would go out to shareholders later next week in the notice of the November 18 annual meeting in Ashburton.

The Fonterra Shareholders' Council has voted to support the proposal being put to the vote.

Federated Farmers Dairy vice-chairman Willy Leferin said the small changes to the proposal as a result of consultation to date could not be disclosed, until the detailed proposal was issued. "While a co-operative, we still have to operate under the strictures of the Securities Act.

Under the three-step proposal previously announced, Fonterra would:

* Allow farmers to hold shares equivalent to 120 percent of their milk production, a 20 percent increase, with incentives to hold shares even if their production falls;

* Cut the value of the shares because ownership is restricted to co-operative members;

* Later move to trading of shares between farmers, without them first having to be sold back to the co-operative.

Source: