Fonterra's Flexible Shareholding structure gets green light from farmers

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Fonterra shareholders have given the co-op's new capital structure proposal the green light with 85.16 per cent of the total farmer votes in support of the proposal.

The final votes on the capital structure proposal were cast at a special meeting in Invercargill early yesterday afternoon.

It was a great result, Chairman at Fonterra, Peter McBride said.

"We're very happy - it's also very humbling," he told The Country Sport Breakfast's Brian Kelly.

"The Board and management, we're united in the belief that the capital structure needed to change and the Flexible Shareholding structure we put up was the best course of action for the co-op."

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It was a good turnout as well, with more than 80 per cent of the eligible votes cast, McBride said.

He wanted to thank everybody involved in the process.

"I want to give a big call out to all the thousands of farmers who participated, gave their ideas, gave their time and took it really seriously. I also just want to thank management for their hard work."

Although it is a great result, Fonterra isn't quite at the finish line yet, as the co-op has to continue working with the Government to effect the changes under the Dairy Industry Restructuring Act (DIRA) - the legislation that enabled the formation of Fonterra back in 2001.

McBride said the co-op remained confident that it could find a regulatory framework that supported the Flexible Shareholding structure.

"We are philosophically aligned which is important."

The strong farmer mandate Fonterra received yesterday would support the co-op's conversations with the Government, as both parties worked together to find a mutually acceptable outcome, McBride said.

"We'll continue to keep our farmers and unitholders updated as we go along."

It was a bit too early to say when the new capital structure would come into effect, McBride said.

"We've got a few more steps to go through first but we're aiming to implement the changes as soon as possible from next season."