Henry van der Heyden
Units in Fonterra's Shareholders Fund, which will raise
up to $525 million, are expected to go on sale on November 5.
Fonterra unveiled details of the fund yesterday, with
chairman Sir Henry van der Heyden describing it as a
"historic day" for the dairy giant.
For the first time in the co-operative's history, the public
would be able to gain exposure to New Zealand's largest
company and the world's largest dairy processor by buying
units in the fund.
The offer comprised $500 million of units, with the ability
to accept oversubscriptions of up to a further $25 million.
The indicative price range was $4.60-$5.50. The final price
payable per unit was expected to be announced about November
27, following the completion of a book build process.
Selected institutional investors and NZX firms were invited
to lodge bids indicating the number of units they wished to
apply for at a range of prices.
The co-operative has forecast a dividend for the 2013
financial year of 32c per share.
The indicative price range implied a 2013 financial year
gross distribution yield of 5.8% to 7%.
It was an opportunity to invest in units issued by the
Shareholders Fund, not an opportunity to acquire Fonterra
shares. However, the return on a unit was "essentially
dependent" on the performance of Fonterra, fund chairman John
Sir Henry said the Shareholders Fund would support liquidity
in the Fonterra Shareholders' Market, allowing farmer
shareholders to trade Fonterra shares among themselves with a
more flexible structure, rather than buying and redeeming
them from the co-operative.
"This will provide permanent capital for Fonterra and reduce
redemption risk, while preserving 100% farmer control and
ownership of the co-operative," he said.
While farmer shareholders and unit holders would invest in
the performance of Fonterra through separate structures, what
they both had in common was the chance to be part of the
continuing performance of the co-operative, which was a "New
Zealand success story", he said.
Chief executive Theo Spierings said Fonterra's performance
showed it was a leader in the international dairy market and
a "unique investment opportunity".
In the 2011-12 dairy season, the co-operative collected about
17 billion litres of milk in New Zealand, and more than 2
billion litres overseas.