Fonterra director and veteran capital markets executive Scott St John has left the board of the shareholder fund's manager, the same day the units plunged to a new low.
A notice to the Companies Office last night noted St John ceased being a director of FSF Management Co, the manager of the dual-listed Fonterra Shareholders' Fund, which gives investors exposure to the cooperative's earnings stream. He is still a director of Fonterra.
The fund's units closed at a record low $4.17 yesterday, slumping 7.3 per cent after Fonterra cut its earnings guidance and ditched its first-half dividend. Any return at the end of the financial year will depend on the cooperative's annual earnings and balance sheet at the end of July. Fonterra's board is reviewing its dividend policy.
At the same time, Fonterra's board raised its forecast payout to the farmer-shareholders who supply the cooperative, estimating a payment of $6.30-6.60 per kilogram of milk solids. That's up from an earlier forecast of $6-6.30/kgMS.
The increased payout to farmers was put down to growing demand from Asia helping drive up global prices, which was also the reason why the earnings forecast was lowered. That tension pitting investors' interests against suppliers has seen the fund's units slump from as high as $8.09 in May 2013, before confidence was dented by the false botulism scare and a slump in the global price prompted Fonterra to offer favourable loans to help farmers through a lean period.