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Fonterra chair Peter McBride believes that both the board and farmers are on the same page when it comes to the co-op's capital structure.
Fonterra chairman Peter McBride believes farmer shareholders’ views on capital structure changes are aligned with the board’s thinking.
McBride says farmer feedback is being taken onboard as the Fonterra board shapes options for the cooperative’s capital structure.
The looming capital structure review was discussed at farmer shareholders meetings around the country over the last two weeks.
“It’s quite a complex process and we still have some work to do,” McBride told Rural News.
“The feedback we are getting is quite aligned with the board’s thinking.”
Maintaining farmer ownership and control is the top priority of Fonterra farmers.
McBride says the board will present its options to farmers within the next few months.
Any changes to the capital structure will be voted at the co-op’s annual meeting in November.
In January, Fonterra invited farmers to take part in a capital structure survey to gauge farmer sentiment. About 1,800 farmers took part.
McBride says the survey results confirm that there is a strong appetite for change, with 62% of respondents either strongly or slightly supporting a change.
A common theme among the nearly 20% of respondents who were undecided was that they’d like to learn more about what the potential options are.
“We will be laying those options out clearly when we get to that stage,” he says.
Farmer ownership and control was the main priority for 82% of those who voted.
A strong balance sheet and providing a good return on investment were the other top priorities.
McBride says they’ve also heard that capital structure should make it easy for new farmers to join and for existing farmers to have more flexibility.
“Another theme to come through was the desire for our co-op to think long term,” he says.
“This was the kind of typical view expressed: ‘Take a long-term approach to decisions, we want to be a strong company for the next 100 years’.
“Then there were a range of views on other matters such as flexibility, access to capital, share price, the performance of the co-op, reasons for supplying Fonterra and reasons for holding dry shares.”
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