Fonterra pleased with share buy-in
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.’’