Fon­terra pleased with share buy-in

Matamata Chronicle - - Rural Delivery - By JEREMY SMITH

A show of sup­port from farm­ers for their co­op­er­a­tive which ‘‘ex­ceeded all the hopes’’ is a hugely en­cour­ag­ing sign ac­cord­ing to Mata­mata’s Fon­terra Share­holder’s Coun­cil councillor Grant Wills.

When the dead­line for buy­ing ad­di­tional shares in the co-op­er­a­tive passed late last month, Fon­terra’s farmer-share­hold­ers ap­plied for 13.5 mil­lion shares, worth $ 61 mil­lion, lift­ing the to­tal num­ber of ‘‘dry’’ shares to six per cent of shares on is­sue.

These ad­di­tional shares are above those farm­ers are re­quired to hold, to back their re­cent or ex­pected milk pro­duc­tion.

Cap­i­tal struc­ture changes ap­proved by farm­ers last year al­lowed them to hold shares in the co-op­er­a­tive of up to 120 per cent of their milk pro­duc­tion.

Fur­ther changes which are un­der way as part of Trad­ing Amongst Farm­ers would al­low farm­ers to hold up to 200 per cent of their an­nual milk pro­duc­tion.

Mr Wills said when farm­ers in­di­cated in 2007 they wanted to main­tain con­trol and own­er­ship of Fon­terra, they needed to show it.

‘‘We also needed to move the com­pany for­ward and I think look­ing at the amount of shares they pur­chased they have done that.

‘‘It shows farm­ers sup­port the vi­sion and di­rec­tion of their co-op­er­a­tive.’’

Ac­cord­ing to Mr Wills, when the cap­i­tal struc­ture pro­posal went to the fi­nal vote ear­lier in the year, Mata­mata was the sec­ond high­est polling ward in the coun­try.

‘‘It might have some­thing to do with the level of con­sul­ta­tion that went on but that level of in­put to me is very im­pres­sive and re­ward­ing.’’

Fon­terra chair­man Sir Henry van der Hey­den said the up­take of shares would fur­ther strengthen the co-op­er­a­tive’s fi­nan­cial po­si­tion.

He said more than 70 per cent of Fon­terra’s 7500 farm­er­share­hold­ers now hold dry shares, rep­re­sent­ing about six per cent of the to­tal shares on is­sue.

‘‘We’ve been evolv­ing our cap­i­tal struc­ture so our farm­ers have a greater in­cen­tive to in­vest in Fon­terra and hold ad­di­tional shares.

‘‘This is good for the health of the co-op and it also gives us as farm­ers more flex­i­bil­ity so we can buy and sell shares when it best suits our farm cash­flows.’’

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