Eleven Options For Fonterra

Published: Tue 23 Nov 2004 01:28 PM
Eleven Options For Fonterra
Replacing peak notes with seasonal pricing and removing a requirement for Fonterra suppliers to own Fonterra shares should be explored in the current review of the dairy co-operative's capital structure, said Kevin Wooding, Chairman of Dairy Farmers of New Zealand (DFNZ).
The two options are included in a comprehensive discussion paper released today by DFNZ, the dairy industry group of Federated Farmers of New Zealand (Inc).
"The discussion paper explores these and a further nine options in depth. I would encourage Fonterra's shareholders and all other interested parties to read the paper.
"Though we are listing options, DFNZ has not taken a position on which are best or indeed if any change is necessary. Those decisions should be taken by the 12,000 individual farmer suppliers who own the co-operative," Mr Wooding said.
The paper concludes the staged release of four independent discussion papers about Fonterra's capital structure and in particular the co-op's fair value shares and peak notes.
"DFNZ wants to give its members independent, reliable and up-to-date information about Fonterra's capital structure. This will help get the best possible outcome for the co-operative and farmer shareholders," Mr Wooding said. The four discussion papers are available at
"One of the simplest options would be to absorb peak notes within fair value shares. Fonterra could then use seasonal prices to reflect the costs and benefits of milk production at certain times of the year," Mr Wooding said.
"Another option is allowing suppliers who do not want to own shares to contract milk supply. This is where the farmer has no ownership capital in Fonterra and simply negotiates a price to supply milk on a short-term or long-term basis.
"Other options explored in the discussion paper include allowing new suppliers to buy their Fonterra shares over several years, dividend leasing, and splitting fair value shares to reflect Fonterra's bulk commodity processing returns and higher value-added activities," Mr Wooding said.

Next in Business, Science, and Tech

Building Activity Down In September Quarter
By: Statistics New Zealand
David McLean Appointed As KiwiRail Chair
By: New Zealand Government
‘More Milk From Fewer Cows’ Trend Continues In A Record Year For NZ Dairy Industry
By: Dairy NZ
Data Reveals ICT Expenditure Key To Small Business Sales Growth
By: Xero
Fonterra Lifts Forecast Farmgate Milk Price Range And Revises Earnings Guidance At First Quarter Update
By: Fonterra
Canterbury Museum: New Research - Bald Haast's Eagle Feasted On Moa Guts
By: Canterbury Museum
Demand High For Covid-proof Businesses
By: ABC Business Sales
View as: DESKTOP | MOBILE © Scoop Media