December 20, 2021

 

Fonterra's Flexible Shareholding structure gets green light from farmers

 

 

Fonterra shareholders have this month given the cooperative's new capital structure proposal the green light with 85.16% of the total farmer votes in support of the proposal.

 

The final votes on the capital structure proposal were cast at a special meeting in Invercargill, New Zealand, on December 9.

 

Fonterra chairman Peter McBride said the board and management are united in the belief that the Flexible Shareholding structure is the best course of action for the cooperative.

 

"...our farmers have agreed. We have received a strong mandate for change with 85.16% of votes cast in favour of the proposal and 82.65% of eligible votes being cast," McBride said.

 

"Changing our capital structure is the most important decision we as farmers have made in almost a decade. The results of this year's resolutions were all above 80%, which shows farmers are united in their support for the direction of the co-op. Our full focus is now on delivering the strategic commitments we have made.

 

"I would like to thank everyone who voted and the thousands of farmers who gave us their time and ideas during the consultation period, which helped us to shape the proposal into the model that was successfully passed..."

 

With a clear farmer mandate for change, Fonterra will continue working with the New Zealand government on how this can be given effect under the Dairy Industry Restructuring Act, the legislation that enabled the formation of Fonterra back in 2001.

 

"I believe we are philosophically aligned with the government and remain confident that we can find a regulatory framework that supports the Flexible Shareholding structure," McBride added.

 

"The strong mandate we received will support our conversations with the government as we continue to work together to find a mutually acceptable outcome.

 

"We will continue to keep farmers and unit holders updated as these conversations progress."

 

The Flexible Shareholding structure will come into effect once the board is satisfied that any steps necessary for implementation have been (or will be) completed. Fonterra is aiming to implement the changes as soon as possible from the beginning of next season.

 

 

Share compliance obligations will remain on hold until at least six months after the new structure is effective. The current cap on the Fonterra Shareholders' Fund remains in place as a cap is a feature of the Flexible Shareholding structure.

 

In addition to the vote on capital structure, Fonterra shareholders have also voted to pass all nine resolutions at the cooperative's annual meeting.

 

- Fonterra

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