Fonterra - linked with the sale of more assets

Fonterra - linked with the sale of more assets

New Zealand dairy giant Fonterra has been tipped to sell more assets in a media report.

The New Zealand Herald newspaper, quoting sources, said the cooperative is poised to announce more details of its strategic review and may be planning to pull out of South America.

Fonterra has already announced that its ice cream business Tip Top is up for sale - with bids due in last week - while its troubled relationship with Chinese infant formula company Beingmate, in which it has an 18.8% shareholding, could also come to an end.

The newspaper notes that the Anchor butter maker releases its half-year results tomorrow (20 March) - the first since Miles Hurrell was made permanent chief executive officer - and that it is expected to update the market on an asset divestment programme designed to reduce debt by NZD800m (US$548.6m).

Its sources say Fonterra's South American assets - which include its Soprole subsidiary in Chile - are ones that could be sold within the July debt-cutting timeframe the co-operative is working towards.

Fonterra's strategic review was announced last autumn, at the same time it reported its first annual net loss, amounting to NZD196m, and debt of NZD6.2bn.

just-food asked Fonterra for a response to the newspaper's story. A spokesperson for the company said: "We're releasing our interim financial results tomorrow. We have said that will include an update on our portfolio review, including announcing the third asset we're reviewing our ownership of (have so far announced Tip Top and Beingmate). Any speculation on what that asset could be is just that - speculation."