The lobby for Fonterra farmer-shareholders has thrown its full weight behind the contentious Trading Among Farmers proposal after weeks of reports that dairy farmers have been going wobbly on their commitment to the scheme.
TAF will create non-voting tradeable units deriving dividends from the value-added part of the Fonterra business, creating an opportunity for farmers wanting to free up equity in the cooperative to do so and allowing private investors partial exposure to Fonterra's fortunes.
The proposal is slowly wending towards implementation, with Fonterra announcing lead managers for the capital restructuring process yesterday, but farmer-shareholders have demonstrated extreme nervousness about the proposals in the past.
The cooperative's 10,500-odd members are determined that they will be the only ones to hold voting rights, to ensure the world's largest dairy exporter remains farmer-owned and controlled.
The issue of non-voting TAF securities has sparked significant international interest and misreporting, which has fuelled fears among farmers that the initiative is a stalking horse for a fully-fledged Fonterra float.
The Fonterra Shareholders' Council issued a statement that it "remains fully supportive of the TAF process," with a spokesman saying the timing was not prompted by any particular event, despite weeks of speculation that TAF continues to face hurdles with Fonterra dairy farmers.
"The Council's position on the matter has remained consistent from the outset," chairman Simon Couper said.
"The Council has supported TAF from its inception conditional on due diligence by the Board and the Council, the pre-conditions being met, and 100 per cent ownership and 100 per cent control being maintained by our farmer shareholders.
"The Council will continue to engage with the board and management in order to gain as clear an understanding of TAF as possible as we prepare to receive the four preconditions."By Pattrick Smellie