Fonterra hires NZX to design trading platform

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Fonterra Cooperative Group has hired securities market operator NZX to help design a platform for shareholders of the world's biggest dairy exporter to trade stock among themselves.

"The farmer-only exchange for trading shares, which will operate on the Fonterra farmer intranet (Fencepost), will be unique, and will be built from scratch," chief financial officer Jonathan Mason said in a statement.

"Fonterra will be using NZX in much the same way as we used CRA to design globalDairyTrade."

The move to set up the platform comes after Fonterra's shareholder-suppliers approved a 'Trading Among Farmers' concept in June that takes the redemption risk for the shares off Fonterra's balance sheet and creates a closed market among the farmers.

"The details of how Trading Among Farmers will work in practice are still at a preliminary design stage and it is too early to speculate on what shape the market will take," Mason said.

"Trading is not expected to begin until late in 2011 at the earliest."

Fonterra also said it has appointed advisors for help with the next step of its capital restructure. Mason said the goal was to create "a deep and liquid market" for the trading of Fonterra shares among farmer-shareholders.

It hired First NZ Capital-Credit Suisse and Deutsche Bank-Craigs Investment Partners for the advice.

Shares of NZX last traded unchanged at $1.40.

- BusinessDesk