16 Nov 2008

Fonterra to tackle capital issues again

9:45 pm on 16 November 2008

Fonterra has indicated that resolving its capital structure is on the agenda for the year ahead.

The company previously proposed allowing limited outside investment to provide more funds for growth, to protect itself from share redemption and give farmers more investment choices.

But it parked the plan before taking it to a vote in May after farmers raised strong concerns about diluting their ownership and control of the company.

Since then, the Fonterra Shareholders' Council has sought the views of farmers on the capital restructuring issue, and received more than 1,000 submissions.

Chairman Blue Read says the overwhelming message was keeping the co-operative structure intact and in farmer control.

But he says issues that triggered the restructuring proposal still have to be resolved.

Fonterra chairman Henry van der Heyden acknowledges that retaining farmer ownership and control is the key issue for farmers.

But he's confident the company and its shareholders can find a solution.

Fonterra expects to bring a fresh new proposal to farmers next year.