Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Fonterra Plan Worse Than Expected


15 November 2007

Fonterra Plan Worse Than Expected

The preferred capital restructure option released by Fonterra today is even worse for farmers and the New Zealand economy than was expected, says New Zealand First primary production spokesperson Doug Woolerton.

“If implemented, today’s proposal will be a disaster for farmers and for our economy as a whole,” said Mr Woolerton.

“Under the proposal, 49.9% of the company could eventually be owned by non – New Zealanders. This would mean that 49.9% of Fonterra’s profit could end up lining the pockets of foreign investors. Given the significant impact of dairying revenue on our economy, it is hard to see how this proposal can benefit our country in the long run.

“What makes today’s proposal even harder to swallow is that that the claims underlying the proposal are rubbish. Capital restructuring and a partial float is not necessary to fund future expansion as is claimed by Fonterra’s chairman. Fonterra has a credit rating almost as good as the New Zealand Government and could very easily secure loans for the $2.5 billion they seek under this proposal.

“Farmers need to think very carefully about what they are being offered. If the proposal is accepted, they will go from having a full collective share in a company built up over several generations to holding just a 65% stake overnight.

“They also need to consider the impact non-farming shareholders will have on their operations. History shows that publicly listed companies are beholden solely to increase returns to shareholders. It is likely the wishes of farmers will be drowned out as their control of the company decreases over time.

“Despite needing a 75% vote in favour of proceeding, proponents of this deal will be strongly urging middle aged farmers who are nearing the end of their careers to ‘take the money and run’.

“The one positive outcome from today’s announcement is that farmers have the power to put an end to this plan, and I strongly urge them to do so,” said Mr Woolerton.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>

ALSO:

Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>

ALSO:

Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>

ALSO:

CO2 And Water: Fonterra (And Dairy NZ)'s Environment Plans

Federated Farmers support Fonterra’s bold push to get to zero emissions of CO2 on the manufacturing side of the Co-operative, both in New Zealand and across its global network. More>>

ALSO: