Wellington - New Zealand dairy cooperative Fonterra - already responsible for more than one third of the international dairy trade - outlined plans Thursday to list on the stock exchange and fuel even greater growth. Fonterra chairman Henry van der Heyden said the preferred option would involve the establishment of two companies: a farmer-owned cooperative similar to the current Fonterra and a new company. All of Fonterra's assets and liabilities would be transferred to the new company, while the farmer-owned company would have no assets but own a controlling stake of 65 per cent in the new company.
A further 15 per cent of the new company would be owned by farmers individually, while 20 per cent would be available to the public.
Fonterra chief financial officer Guy Cowa said the 20 per cent listing should raise around 2 billion to 2.5 billion New Zealand dollars (1.5 billion-1.9 billion US dollars)
Individual farmers would be able to sell their stakes in the company, which would be part of the total 15 per cent they would own.
Fonterra is a cooperative owned by 11,000 New Zealand farmer- shareholders. It has company revenue of around 13.9 billion New Zealand dollars (10.9 billion US).
Van der Heyden said in a statement that the preferred capital structure, one of six options considered, would address how to meet three challenges: raise enough capital to pay for an ambitious growth plan, minimize farmers leaving the co-op and giving farmers more flexibility in how they use their capital.
Van der Heyden said that Fonterra needed to be bold and brave.
"What we are considering is a further evolution of our cooperative to enable Fonterra to continue to adapt, to ensure it remains relevant and competitive in the changing global dairy market," he said.
Fonterra's farmer shareholders would be asked to vote at two points during the two-year consultation process, with the first vote scheduled for May 2008.
Fonterra said in a statement that the New Zealand government had assured the company of any necessary legislative support.
The Government may face opposition from other political parties. Two minor parties that are participants in the multiparty government agreement have said they would withhold crucial legislative support.
