KEY POINTS:
Fonterra is making progress with fresh plans for a capital restructure of the co-operative but the dairy giant is cautious about the timetable.
In November 2007 Fonterra launched a capital restructure process that included the prospect of part of the business being listed on the NZX.
However, the plan was stopped before the first vote when it became clear farmers would not support the board's preferred model, which included creating a listed asset-holding company.
Chairman Henry van der Heyden said the board had to learn from what it got wrong.
"So the next step on the capital structure of Fonterra will not be the November [preferred] option - let's make that very, very clear," van der Heyden said.
The company had been out of step with farmers and gone far too far, he said.
"Secondly the shareholders' council wasn't in a position to support the board.
"So I think we've got to get into a position before we go out next time and talk to our farmers, we need to get the shareholders' council and the board aligned."
Chief executive Andrew Ferrier said Fonterra still needed capital restructure to deal with the redemption risk of buying back shares if farmers left the company.
Farmers buy shares based on the level of milk they supply.
The drought last year meant Fonterra had to write out a cheque for between $500 million and $600 million.
"I think the current economy brings a bit more realism to some of these issues that have been more theoretical in the past," Ferrier said. "In a bizarre way that'll actually help move this process forward."
The latest three-year business plan could be achieved without a restructure, he said.
"But I'll tell you that certainly our board is still very actively engaged in the capital structure debate.
"There will be further discussions with the shareholders' council and at a time when we have strong consensus across the leadership of Fonterra, both board, council and management, there will be further discussions with farmers about trying to find a solution that makes sense."
Farmers had also spoken about the need for a complete package, rather than the previous plan which had been launched subject to issues such as the milk price.
"That's why we're now working through the complete package," said van der Heyden.
"The board's spent quite a bit of time on that over the last couple of months and we're just starting to engage the shareholders' council now."
However, there was no date by which a decision had to be in place and until the issues had been dealt with there was no point putting a timetable in place, he added.
Shareholders' council chairman Blue Read said there was no doubt that the board had learned from the previous attempt.
"There's an appreciation of farmers' values and the need to consult is very much appreciated by the board," Read said.
"There's also a realisation of the responsibility that all the parties bear in that. Just doing the job properly and ... with good vigour so that there's engagement and it's active engagement, talking with rather than talking at."
Farmers had an expectation that there needed to be a review of factors including redemption risk and raising capital, he said.
"Farmers have got a realistic attitude to that, open to it, it will depend very much on the proposal that comes forward as to how enthusiastic they'll be or not."
There was also an acceptance among farmers that Fonterra needed to be overseas, he said.
"But there's some riders on that as well as far as making sure that the value of New Zealand milk is not compromised by getting offshore milk."
