Fonterra Board Wants to Tighten Trading Among Farmers Controls
Chairman Sir Henry van der Heyden said that during the ongoing due diligence process, every aspect of Trading Among Farmers was being stress tested and this would continue until implementation.
23 May 2012 --- Fonterra Co-operative Group Limited's Board has decided it will ask farmer shareholders to vote on a special resolution to tighten controls around Trading Among Farmers at the Special Meeting on June 25. This will be in addition to the resolution on shareholder support for Trading Among Farmers.
Chairman Sir Henry van der Heyden said that during the ongoing due diligence process, every aspect of Trading Among Farmers was being stress tested and this would continue until implementation.
"It has always been acknowledged that the size of the Fonterra Shareholders' Fund has to be managed carefully to ensure 100% farmer control and ownership is protected.
"Following input from Fonterra's Shareholders' Council and our due diligence advisors, we will recommend tightening up some of the previously agreed thresholds on the size of the Fund, as a prudent measure. These thresholds will be enshrined in our Constitution -- subject to a 75% farmer shareholder vote."
Sir Henry said all of the resolutions were now being finalised and would be in the Voter Pack mailed out to farmer shareholders at the end of this month.
Following this week's Board meeting, the Board also gave its qualified view that the first four pre-conditions for the launch of Trading Among Farmers would be met, subject mainly to legislative changes and regulatory consents and confirmations.
"The Board's position is that -- subject to a few important steps still to be completed and majority support from the Shareholders' Council -- we are satisfied the pre-conditions are able to be met.
"We need to be assured the necessary amendments to the Dairy Industry Restructuring Act (DIRA) and other legislation have been made -- and any DIRA pre-requisites have been met and implemented prior to giving final approval to the pre-conditions.
We also need confirmation of the necessary regulatory consents and confirmations -- for example, that the rules for the Fonterra Shareholders' Market have been approved by the Financial Markets Authority.
"And we must be able to assure Council and our farmer shareholders that Trading Among Farmers will be implemented in substantially the same manner set out in the Trading Among Farmers Blueprint," said Sir Henry.
The Board will provide to Council a final report showing how the pre-conditions have been met - prior to the Board formally resolving that Trading Among Farmers be implemented, which is likely to take place in July.
