Almost three-quarters of Fonterra Cooperative Group's farmer-shareholders have purchased an additional 13.5 million 'dry' shares over and above the milk production share backing required to supply milk to the co-operative.
At the extended September 30 closing date for farmers to take up the dry share offer, $61 million worth of
shares at a current price of $4.52 were applied for by farmers for the 2010/11 season.
This represents 6 per cent of the total shares on issue.
Chairman Henry van der Heyden said their uptake "was a vote of confidence in Fonterra's performance and would further strengthen the Co-op's financial position."
Capital structure changes to Fonterra were approved by farmer-shareholders in 2009 allowing producers to hold shares representing up to 120 per cent of their milk production. This percentage will soon increase as a 'Trading Among Farmers' option which was recently approved by shareholders, allows farmers to hold shares up to 200 per cent of their annual milk production.
"We have been evolving our capital structure so our farmers have a greater incentive to invest in Fonterra and hold additional shares," said van der Heyden. "This is good for the health of the Co-op and it also gives us as farmers more flexibility so we can buy and sell shares when it best suits our farm cash flows."
More than 70 per cent, or 7500 Fonterra farmer-shareholders are now holding dry shares, and they are able to buy shares during a defined period each year.
