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

 

Fonterra to sell up to $525M units at indicative $4.60-$5.50

Fonterra to sell up to $525M of units at indicative price of $4.60-$5.50, accounting for 7% of shares

The Fonterra Shareholders’ Fund will raise as much as $525 million selling shares in an indicative price range of $4.60 to $5.50 apiece, giving outside investors exposure to up to 7 percent of the dairy cooperative’s equity, offer documents show.

The final price will be set by a bookbuild among institutions and NZX firms on about Nov. 27.

Fonterra unveiled the prospectus for the fund aimed at providing liquidity for the Trading Among Shareholders scheme, one of the biggest overhauls of the dairy giant’s capital structure since its inception in 2001.

Unit holders will get the rights to Fonterra’s share dividends without owning the shares. The change will take share redemption risk off Fonterra’s own books, which has billowed to more than $700 million in recent years, by giving farmers a venue to trade the shares among themselves.

Under a section on investment risks in the prospectus, the fund is described as having “a novel structure”.

Dividends for the 2013 year are forecast to be unchanged at 32 cents a share, representing a yield of 5.8 percent to 7 percent based on the indicative price range, on forecast profit of $690 million. Normalised earnings before interest and tax for 2013 are forecast at $1.079 billion from $1.028 billion in 2012.

The units are scheduled to start trading on the NZX and on the ASX on a deferred settlement basis on Nov. 30.

The arrival of the units is seen as a shot in the arm for the NZX, which has faced stagnating new issues and will get a further boost with the sell down on state-owned energy companies. Up until now, outsiders have only been able to get exposure to New Zealand’s biggest exporter and largest company by holding the NZDX-listed bonds.

“Farmer shareholders and unit holders will invest in the performance of Fonterra through separate structures,” chairman Henry van der Heyden said. “What they have in common is the chance to be part of the continuing performance of our cooperative – a New Zealand success story.”

The fund will offer $500 million of units with provision for over-subscriptions of $25 million. Depending on the price, that would see a maximum of 91 million to $109 million units issued. Fonterra shares on issue after the offer will be 1.586 billion to 1.598 billion, giving the group an implied market value of $7.35 billion to $8.7 billion.

Units will be set aside for two groups under the offer. So-called Friends of Fonterra can subscribe for up to $50,000 each, with no limit set, while up to $25 million of units will be offered to shareholders of Bonlac Supply Co under the Australian Supplier Offer.

The Farmer Shareholder Supply Offer will open on Nov. 2 and the farmers will be able to sell into the fund the economic rights to up to 25 percent of their so-called wet shares and any dry shares surplus to the so-called share standard for the season.

Since there’s a chance farmers won’t offer up enough shares to meet the minimum fund size of $500 million, Fonterra will issue shares to make up the shortfall.

Fonterra exports about 2.6 million tonnes of dairy products a year, accounting for about 21 percent of dairy shipped across borders and 46 percent of whole milk powder shipments.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Economy: COVID-19 Lockdown Has Widespread Effects On Labour Market

In the June 2020 quarter, the seasonally adjusted unemployment rate fell to 4.0 percent, down from 4.2 percent last quarter, while underutilisation rose, Stats NZ said today. More>>

ALSO:

NZ Post: New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3

New research by NZ Post into how the COVID-19 response has impacted the way Kiwis shop online, shows online shopping increased 105%* when the country moved into Alert Level 3, and may have changed the way Kiwis shop permanently. Online spend peaked ... More>>

ALSO:

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:

Bankers Association: Banking Becomes First Living Wage Accredited Industry

Banking has become New Zealand’s first fully living wage accredited industry, leading to nearly 1800 employees and contractors moving onto the living wage and gaining greater economic independence for them and their families. As of today, all ... More>>

ALSO:


QV Valuations: July House Price Index Illustrates Market Resilience

According to the July 2020 QV House Price Index (HPI) results out today , property values recorded a marginal increase, up 0.2% over the month. This is somewhat of a turnaround from June, after the national index edged 0.2% lower. More>>

ALSO:

Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO:

Stats NZ: Mixed Performance By Regions Leaves National Emissions Picture Unchanged

Approximately two-thirds of New Zealand’s regions recorded decreases in their total greenhouse gas emissions, while one-third of regions saw increases between 2007 and 2018, Stats NZ said today. “While some regions reduced their emissions, ... More>>