His first public response to the Fonterra capital restructuring process contained no answers but plenty of open questions.
Shewan says a possible buyback was way down the track, following a confirmed appetite for the move among Fonterra’s farmer-shareholders, a price negotiation, a 75% approval from unit holders and conditional on Dairy Industry Restructuring Act changes.
The management company of the FSF has met with Fonterra several times, most recently for a confidential briefing on the consultation feedback on June 14.
In common with supply shareholders, unit holders are most concerned about the big fall in share and unit prices since the capital restructuring process was first announced (Farmers Weekly, June 25).
“The manager can give unit holders no assurance about the price or liquidity of trading in the fund as these are matters the manager has no control or influence over,” Shewan said.
“Farmer support seems mixed on Fonterra’s consultation on whether farmers would prefer the fund to be bought back, or continue with a permanent cap.”
Any buyback would have to be approved by 75% of all unitholders eligible to vote.
Shewan said the whole restructuring proposal remained up in the air and would be discussed for several months to come.
When Fonterra placed a temporary halt on transfer of dry shares to fund units on May 6, the fund manager and its independent directors had no role in the decision, except for a prior confidential briefing.
