Fonterra Cooperative Group owes holders in its Fonterra Shareholders Fund units a "more fulsome" update on Beingmate, the struggling Chinese infant formula producer and distributor that Fonterra uses to push its leading Anmum formula into the Chinese market, according to an analyst.
In a note to investors dated September 7, First New Zealand Capital's head of institutional research, Arie Dekker, identifies the lack of transparency about Fonterra's 18.8 percent shareholding in Beingmate as a confidence as well as a performance issue for investors.
"We view the investment as a material one from both a financial and confidence perspective. We think the time is right for FSF to provide a more fulsome disclosure on what has happened with Beingmate and the reasons why it remains confident in the long term future."
A Fonterra spokesman confirmed that there would be an update on Beingmate in the cooperative's September 25 earnings announcements.
FNZC values the Fonterra stake in Beingmate at approximately $420 million, down around 45 per cent on its March 15 purchase price of around $756m, reflecting a range of problems at Beingmate, which included the firm declaring a $78m loss for the most recent half-year, having previously given guidance for a $10m profit for the period.