Trading halt as Fonterra makes plans
WELLINGTON: Fonterra placed its shareholder fund into a trading halt yesterday, before an announcement today about its capital structure.
Fonterra has given little detail about the review but chief executive Miles Hurrell has maintained the organisation would remain a cooperative.
‘‘Fonterra remains in a strong financial position and the consultation process will not affect the cooperative’s ability to operate,’’ it said.
Rabobank senior dairy analyst Emma Higgins expected a variety of options would be put forward today.
‘‘The current structure was created in 2012 after a few years of consideration and it has been signposted that the structure, as it stands, isn’t currently fit for purpose.’’
Ms Higgins said while it was unclear exactly what those options would be, a survey early in the year showed there was support for change.
‘‘Just under 2000 farmers took part in that and over 60% of those respondents did support a change to the current structure and the top priorities for those farmers were around maintaining farmer ownership and control, and making sure that the cooperative had a really strong balance sheet.’’
Ms Higgins said farmers also wanted to make sure Fonterra made a good return on investments. She expected some of those factors to come forward in the structure changes.
Fonterra said following today’s announcement, the trading halt would remain in effect until the market opens tomorrow, to provide Fonterra shareholders and unit holders a full day to review and consider the materials. — RNZ