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Fonterra CEO Theo Spierings.
Danone has been awarded damages from Fonterra Co-operative Group totaling $183 million – fall-out from Fonterra’s product recall of 2013.
Fonterra has confirmed the amount, but is not yet able to comment on the full financial implications for the co-operative. Earlier today it requested an immediate trading halt to be applied to their securities on the ASX, the NZX and the Fonterra Shareholders Market to give it time to consider the impending decision.
The damages have been awarded by the arbitration tribunal considering a $980 million damages claim made against the cooperative by Danone. The Danone claim followed Fonterra’s 2013 whey protein concentrate precautionary recall.
Fonterra CEO Theo Spierings said the co-operative expected to make a market announcement in relation to the Danone arbitration decision as soon as possible after the decision is received.
“Fonterra remains in a strong financial position and any damages award will not affect our ability to operate. We will share further details with the market, our farmers and staff as soon as practical,” he said.
Danone has released a statement saying it welcomes this arbitration decision “as a guarantee that the lessons from the crisis will not be forgotten”.
In a follow-up to this old mutt’s piece two issues ago about Fonterra directors getting to grips with the co-op’s financial state and loudly sharing their dismay in the Koru club, another of the Hound’s spies has passed on more news in the ‘Fonterra director watch’ category.
Fonterra says there’s an urgent need to improve return on capital invested in the co-op by farmers and unit holders.
Fonterra has taken a $126 million hit over the sale of its stake in Venezuelan consumer joint venture, Corporacion Inlaca.
Fonterra is pulling out of a European joint venture as part of its portfolio review following last year’s disastrous financial results.
Fonterra says it has returned to profitability with a net profit of $80m for the first half of the 2019 financial year.
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