The Fonterra Shareholders’ Council says the dairy co-op’s Trading Among Farmers proposal will be put to the vote at a special meeting of shareholders on June 30th.
Fonterra Shareholders’ Council chairman Blue Read said Trading Among Farmers will eliminate the redemption risk currently faced by Fonterra and to provide a permanent capital base for the co-op.
“The trading among farmers proposal provides a unique opportunity to move the co-operative and New Zealand dairying forward,” said Mr. Read.
Share trading among farmers would shift the redemption risk from the cooperative back to the individual farmer – at present farmers can rely on Fonterra to buy back their shares.
Mr. Read said there is still a lot of detail to be worked through before Trading Among Farmers could be implemented.
Fonterra has also suggested that in addition to farmers trading shares among themselves, there should be investment units sold to the public and linked to dividends and capital gains on the shares.
That could well suit sharemilkers and retiring farmers.
The next step of the capital restructure will need 75% approval of constitutional change from shareholders voting at the June special meeting
