The buyback may run for up to 12 months and is separate from Fonterra's plan to spend $300m on supporting liquidity during the transition to a new requirement that farmers will need to own one Fonterra share for every three kilograms of milk solids they supply to the co-operative, rather than the current one-for-one ratio.
The buyback is also separate from Fonterra's plan to have a market-making arrangement.
McBride said Fonterra will implement the new structure as soon as possible but hasn't yet set a date.
Government support
He noted the government announced its support of the restructure in April and that it expects the amendments required to the Dairy Industry Restructuring Act to progress through parliament this year.
"We remind shareholders that, even though share compliance obligations remain on hold until at least six months after the new structure is effective, shareholders can still buy or sell shares within Fonterra's current constitutional limits," McBride said.
That is generally one to two times a supplying shareholder's three-season average milk supply.
"Shareholders should seek advice from their financial advisor, accountant, lawyer or rural professional before making any decisions," he said.
The maximum number of shares Fonterra will buy under the scheme is nearly 80.7 million shares, or 5 per cent of Fonterra's shares on issue 12 months prior to the acquisition of shares. Any shares it buys will be cancelled.
"Throughout the buyback period, Fonterra will continue to assess market conditions, its prevailing share price, available investment opportunities and all other relevant considerations."
The buyback will be suspended during the black-out period relating to Fonterra's 2022 results, which will run from August 1 to the first trading day after the results announcement, unless Fonterra agrees to other arrangements with the brokers who will execute the buyback.