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Fonterra to put new capital structure proposal to vote, but with changes (Update 1)
Fonterra has confirmed it will propose capital structure changes to its shareholders at its annual meeting on November 18. The changes proposed include the first two steps of a capital structure reform, including asking farmers to buy an extra 20% of 'dry' shares in Fonterra and limiting the value of these shares to NZ$4.52 a kg for several years. (Update 1 includes the Fonterra statement and more details)
Fonterra did not specify immediately what changes would be made to step 1 in the proposals. Step 3, which is due to be voted on in 2010, would include a system for farmers to trade the shares with each other. Fonterra's shareholder council has approved the proposal going to the vote on November 18.
Here is the full statement below from Fonterra.
Following a positive round of meetings with farmer shareholders, Fonterra's Board of Directors has decided a vote on changes to the Co-operative's capital structure will be held at the annual meeting on November 18.
Fonterra chairman Sir Henry van der Heyden said directors were pleased with the strong attendance and feedback from shareholders at the 77 meetings held around the country.
"We had a record turnout of 3,500 farmers at the meetings. We're encouraged so many farmers attended to give us their views," Sir Henry said.
"We've listened to this feedback and it has generally been supportive. We are making some changes to Step One (Strengthening the Share Structure) and Step Two (Restricted Share Value) stays the same. A detailed proposal will go out to shareholders in the Notice of Meeting, around October 30."
The Fonterra Shareholders' Council has voted to support the proposal that is being put to the vote.
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Sir Henry said that in the meantime discussions with farmers are continuing with smaller regional "˜shed' and "˜on-farm' meetings being held throughout the country.
"We will be backing these up with a round of 40 meetings between November 9-11, where farmers will be able to further discuss Steps One and Two with directors," Sir Henry said.
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