With a capped Fund, shares will not be able to be exchanged into units in the Fund on a day-to day basis, and the Board would retain its current rights to regulate this process. The overall limit on the size of the Fund will be reduced from 20% to 10% of total shares on issue. This recognises that the Fund size, which is currently around 6.7% of total shares on issue, could change from time to time subject to the overall limit.
Having the Fonterra Shareholders’ Market (FSM) operating as a farmer-only market means that our farmer shareholders will set the prices at which they buy and sell shares, without the traded price being influenced by external investors.
We will allocate up to $300 million to support liquidity in the FSM as farmer shareholders transition to the new structure.
These changes will help protect farmer ownership and control.
Capping the Fund means our Co-op will be able to maintain a stronger balance sheet compared to buying back the Fund, giving us more options to support liquidity in the FSM.
The Fund and unitholders remain an important part of our Co-op. The Fund will continue to provide a means by which non-dairy farmers can invest in the future of our Co-op.