Tuesday, 10 November 2015 13:54

Thumbs down for capital structure remit

Written by Greg Ford

font size decrease font size increase font size
Print
Email

Murray Beach.

Fonterra directors and shareholder councillors have strongly recommended farmers vote against a proposal to change the cooperative's capital structure.

Shareholder Murray Beach has successfully included a complex and detailed proposal to change the cooperative's shareholding rules; farmers will decide its fate at their annual meeting in Waitoa later this month.

Beach is also contesting the co-op's director elections. But his fate already seems sealed.

The ramifications of Beach's plan are profound. So in the meeting notice Fonterra's board has published a damning explanatory note: "The proposal is detailed but contains a number of inconsistencies and unworkable features."

The board says the proposal "would re-introduce redemption risk which was removed by the changes made to the constitution by shareholders as part of Trading Among Farmers".

"The proposal is also inconsistent with the current statutory framework provided for in the Dairy Industry Restructuring Act 2001. The re-introduction of redemption risk would undermine the company's financial strength which would impact [its] strong credit rating and its ability to secure debt funding on favourable terms."

More like this

Divestment means Fonterra can focus on its strengths

OPINION: Fonterra's board has certainly presented us, as shareholders, with a major issue to consider.

Fonterra vote

OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.

Fonterra to boost UHT cream production with $150m plant

With Fonterra's UHT plant at its Edendale site less than a year from completion, demand continues to grow for products the plant will produce, such as Anchor Whipping Cream.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Featured

Nichol is new PGW chair

A day after the ouster of PGG Wrightson’s chair and his deputy, the listed rural trader’s board has appointed John Nichol as the new independent chair.

Tributes pour in for former PM Jim Bolger

Tributes are pouring in from across the political divide for former Prime Minister Jim Bolger who passed away, aged 90.

Fieldays to rebuild Mystery Creek services building

The iconic services building at National Fieldays' Mystery Creek site will be demolished to make way for a "contemporary replacement that better serves the needs of both the community and event organisers," says board chair Jenni Vernon.

Perrin Ag welcomes new consultant Alyssa Brazendale

Agri advisor Perrin Ag says its graduate recruitment programme continues to bring new talent into the agricultural sector.

Entries open for 2026 NZ Dairy Industry Awards

Entries are open for the 2026 New Zealand Dairy Industry Awards (NZDIA).

Rural women shaping New Zealand’s sustainable horticulture future

As New Zealand marks International Day of Rural Women today, women from across the horticulture sector are calling attention to the crucial role they play in building a more sustainable, inclusive and climate-resilient industry.