25 June 2012

3 minute read

Oceania

Fonterra Chairman Sir Henry van der Heyden said the final vote on the share trading scheme attracted a record voter turnout.

"Our farmers have voted in big numbers, representing 85 per cent of the Co-op's milksolids. It is great to see so many taking part and having their say.

"Now we can move forward with this important evolution in our capital structure," he said.

"We've spent six years talking about capital structure and it has been a rigorous debate and process. Our farmer shareholders have made a great contribution and the final version of Trading Among Farmers is all the richer because of that input."

Sir Henry said TAF ensures a stable, permanent capital base for the Co-op and secures its future.

"We broke new ground with the formation of Fonterra and now we have the support from our farmer shareholders to refine that model and to break new ground again.

"As in the past, our farmer shareholders will now get behind the Co-op as we move forward. That's what we all want, a united Fonterra.

"Over recent months we have used some of the best legal minds and co-operative specialists to stress test the concept and proposed trading system as part of the Due Diligence process. This final vote shows the majority agree that TAF is a fundamental pillar for the Co-op and the Board is absolutely unanimous in the belief that this is a lasting solution."

Sir Henry said the Board listened to farmer shareholders' concerns on preserving 100 per cent farmer control and ownership and the integrity of the Farmgate Milk Price.

"We asked our farmers to vote on constitutional changes which would tighten limits on the size of the Fonterra Shareholders' Fund, which is fundamental to 100 per cent farmer control and ownership, and preserve the integrity of the Farmgate Milk Price. This resolution required a 75 per cent vote and received 72.8 per cent support."

The Board will take this resolution back to the next annual meeting in November and will seek Shareholders' Council support for this. In the interim, further planning on Trading Among Farmers will proceed within the parameters outlined in Resolution 2. Sir Henry said the Board believed this was in the best interests of the Co-op.

Willy Leferink, Federated Farmers Dairy chairperson said the organisation was disappointed that this vote only got a 73 per cent, two per cent short of the 75 per cent required.

“Federated Farmers is disappointed this resolution did not quite make it, as this was the important one around putting controls on TAF.

Fonterra Chief Executive Theo Spierings said the vote for TAF means Fonterra can be in charge of its own destiny.

"TAF will stop money washing in and out and give the Co-op a stable, permanent capital base to deliver on its Strategy Refresh.

"There is no co-operative anywhere around the world that is the same as Fonterra. TAF is completely unique as is the solution to eliminating redemption risk.

"We will now be able to implement our strategy and remain a relevant player in the global dairy industry. With overall demand for dairy growing, TAF will ensure that we are well placed to grow volumes and protect our position as the world’s leading dairy exporter."

Sir Henry said the Board is still working towards a November launch for TAF but this will be dependent on market conditions. The pre-conditions in the Constitution still need to be finally satisfied, including the support of the Shareholders’ Council. The Board is confident that the necessary changes to the Dairy Industry Restructuring Act and the waivers are on track for this to happen. The Board will determine an exact launch date closer to the time.

TheCattleSite News Desk