Fonterra no to listing on NZX

Fonterra says a public share listing is not part of upcoming consultations with farmer shareholders. The statement followed speculation about Fonterra's capital structure review reports Stuff. Chairman Sir Henry van der Heyden said the announcement would allow shareholders to debate the issues without needless distraction. "Many of our shareholders have made it clear they want to retain 100 per cent farmer control and ownership of their co-operative," Sir Henry said. Under Fonterra's constitution, 75 per cent of votes must support any change to capital structure. "Taking a public listing off the table is a pragmatic, commonsense approach which reflects how our shareholders feel. It would be a waste of time and money to debate the merits of a public share listing when there is no prospect of securing a 75 per cent vote," Sir Henry said. The Fonterra board would discuss with farmers possible solutions to take care of Fonterra's capital structure issues for the immediate future. "This is all designed to address redemption risk and to secure capital for the cooperative." At present Fonterra's shares relate to milk production and are redeemable. This means at times of falling production, significant amounts of equity are lost from the balance sheet, affecting debt-to-equity ratios.The consultation process with shareholders begins on September 18.