Offer will give farmers flexibility

A supply offer enabling Fonterra farmer shareholders to sell the economic rights of some of their shares will open in May.

They will have the opportunity to offer to sell the economic rights of up to 25% of their minimum required shares (wet shares) to the Fonterra Shareholders' Fund.

The offer provided additional flexibility for farmer shareholders by enabling them to release some of the value of their shareholding and improve cashflow, Fonterra chairman John Wilson said.

It would not increase the size of the shareholders' fund. Fonterra would purchase the units that arose as a result of the offer and subsequently redeem them for Fonterra shares, which meant it did not affect the total number of units on issue.

The co-operative raised about $475 million in equity when it seeded the shareholders' fund to ensure it reached $525 million when it was launched in November last year.

It was always intended that amount would be made available to farmer shareholders and the supply offer was a ''key way'' of achieving that, Mr Wilson said.

Farmer shareholders and unit holders would receive additional shares and units through a bonus issue next month. Information explaining the supply offer, together with an application form, will be sent to all farmer shareholders in late April.

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