Shareholders of Bonlac Supply Company (BSC) have supported a proposal that will deliver them a one-for-eight bonus share issue later this financial year.

At the company's annual general meeting in Melbourne today, shareholders voted overwhelmingly in favor of changes to the constitution enabling the adoption of a new shares policy recommended by the Board.

The new policy is designed to secure shareholders greater equity in the company through a series of bonus share issues over the coming years.

"The way is now clear to issue bonus shares as a means of increasing the value of all shareholders' investment in the company," said Chairman Noel Campbell.

"It is also our intention to reinstate the traditional cash dividends when circumstances permit."

The 1:8 bonus share issue, planned for March 2002, will effectively increase the value of individual shareholder's investment in BSC by 12.5 per cent.

BSC is 100 per cent owned by Bonlac milk suppliers and, in turn, holds 75 per cent of the equity in the dairy products manufacturer Bonlac Foods Limited (BFL).

Mr Campbell, who is also Chairman of BFL, said that Bonlac had stabilised since the establishment of its alliance with Fonterra Co-operative Group of New Zealand in May 2001 and had made a solid start to the current financial year.

"We are steadily regaining the confidence of our suppliers by delivering on our promises, including the commitment to pay a competitive milk price," he said.

"Most importantly we have stemmed the loss of milk supply and have started regaining some ground."

At today's BSC annual general meeting, Bonlac supplier shareholder Mary Brown, of Wyelangta in western Victoria, was elected unopposed to a vacant position as a Director.

Mervyn Ford, of Tallygaroopna in northern Victoria, was re-elected as a Director
after defeating two other candidates in a ballot.

Following their election as Directors of BSC, Mrs Brown and Mr Ford will also be appointed to the Board of Bonlac Foods Limited.

Mr Campbell advised shareholders that Bonlac expects to announce the appointment of a new Managing Director and CEO early in December.