Fonterra Rule Out Public Listing in Capital Restructure
NEW ZEALAND - Fonterra have confirmed that a public share listing will not be part of the capital structure consultation to begin shortly with farmer shareholders.
7 September 2009
1 minute read
Sir Henry van der Heyden, Fonterra Chairman, said: "Shareholders have made it clear they want to retain 100 per cent farmer control and ownership of their co-operative."
For Fonterra's shareholders, this decision means that without outside investment any funds needed to help the co-operative grow and reduce debt will have to come directly from themselves.
A three-step package is to be announced on 18 September, to provide a capital structure for the company's immediate future. The package is designed to address redemption risk and to secure capital for the co-operative.
At present Fonterra’s shares relate to milk production and are redeemable. This means at times of falling production, significant amounts of equity are lost from the balance sheet, affecting debt-to-equity ratios.
The consultation process with shareholders will begin on 18 September.
TheCattleSite News Desk
