Extended Exits

We are providing greater choice about how long shareholders retain an investment in the Co-op after they cease supply.
Extended Exits
  • For supplying shareholders on 9 December (including those who’ve already ceased supplying but haven’t yet sold their shares under the current 3-season requirements), up to 15 seasons initially and reducing down to 10 seasons.  
  • For new supplying shareholders, up to 5 seasons. 
  • For sharemilkers, contract milkers and farm lessors, up to 3 seasons.

As supplying shareholders will have longer time frames to sell their shares, and we know that ownership arrangements are often restructured or changed on retirement, we will enable these farmers to transfer their shares to a person(s) approved by our Co-op who is related to or associated with them. 

We will look to introduce additional guidelines to set out criteria in relation to these “permitted transfer” provisions.

To support the alignment of share ownership and milk supply, the proportion of shares held by shareholders that have ceased supplying the Co-op is intended to be less than 25% of the shares in the Co-op.

 

Why have we made this change?


We recognise the impact on our existing farmer shareholders in moving to a restricted market, which is why we want to give them a longer timeframe to sell.  It will give all existing farmer shareholders greater choice about how long they retain an investment in our Co-op after they cease and should also help reduce any shorter-term sell-side pressure that may arise from the changes.

KEY FEATURES OF FLEXIBLE SHAREHOLDING
  • Increased Flexibility

  • Capped Fund

  • Future Owners

  • Extended Exits

  • Easing Entry

Giving all supplying farmer owners more flexibility in the number of shares they hold.

Capping the Fonterra Shareholders' Fund (Fund) and moving to a farmer-only market.

Creating a more inclusive pathway to becoming a Co-op member where sharemilkers, contract milkers and farm lessors could buy and sell shares as associated farmer owners.

Providing greater choice about how long farmer owners retain an investment in the Co-op after they cease supply.

Easing entry provisions to allow new entrants (or existing supplying farmer owners who have a material increase in milk supply) six seasons to achieve their 33% Minimum Holding.