Fonterra’s farmer shareholders have bought NZ$270.7m (US$191.4m) shares in the New Zealand dairy co-op following changes to the group’s capital structure.
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In a share application period that ended last week, farmers were given the opportunity to adjust their shareholding up or down, to between 100% and 120% of their current or expected production, at a price of NZ$4.52 per share.
Out of Fonterra’s 10,500 farmer shareholders, a total of 3,520 subscribed for 61.6m shares.
Under the capital structure changes, farmers now have greater flexibility in the number of shares they own in proportion to their milk production – rather than adjusting their shareholding up and down each season strictly in line with milk production.
Fonterra chairman Henry van der Heyden said farmers had responded well to the share issue, despite the difficult circumstances many of them were currently facing.
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By GlobalData“It’s very pleasing that a significant number of our farmer shareholders have shown their support for the cooperative by taking up more shares. This is despite the fact that cash flows continue to be tight and drought conditions are starting to bite in some parts of the country – making it hard for many farmers to take up additional shares right now.”
The company did not indicate what the cash would be used for and was unavailable for comment at time of press.
