Fonterra boss to miss TAF vote

ANDREA FOX
Last updated 11:18 25/06/2012

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Fonterra's new chief executive Theo Spierings is not appearing in person at today's crucial vote on share trading among farmers (TAF), instead addressing farmer-shareholders by video-conference.

Spierings is in his home country, The Netherlands, due to serious illness in his immediate family and for business reasons.

About 1000 Fonterra farmer-shareholders have gathered at eight venues around the country to vote on the co-operative's proposal to introduce TAF - promoted as the biggest decision facing Fonterra since its creation 11 years ago.

The main special shareholders' meeting is in Hamilton with video links to other venues in Northland, Rotorua, Taranaki, Palmerston North, Nelson, Ashburton and Southland.

Fonterra chairman Sir Henry van der Heyden kicked off the meeting at Hamilton's Claudelands Events Centre warning that the risk of government intervention in Fonterra's capital structure was extremely real and saying it would be back to the drawing board - and three to four more years of work - if shareholders did not support TAF today.

Spierings, who joined Fonterra in September and has been a central figure in driving promotion of its need to change its capital structure to provide it with permanent capital, beamed in by video-conference to address the farmers.

The TAF proposal was mooted three years ago and farmers voted in the general concept in 2010.

However, concerns over the plan to offer non-farmers NZX-listed, dividend-carrying units in up to 20 per cent of Fonterra shares sparked fears that farmers would lose control of the world's biggest dairy exporter. Strong opposition from a vocal bloc of farmer shareholders forced today's second vote.

Fonterra leaders say TAF will remove Fonterra's obligations to cash up its farmers' shares should they want to exit the company or reduce milk supply. They claim those obligations make the big co-operative's balance sheet vulnerable and say TAF would address this.

Voting is expected to be close. A 50 per cent vote of support is required for TAF to proceed, although van der Heyden has said he wants a clear mandate of more than 50 per cent. A second board resolution around technical aspects of TAF requires a 75 per cent vote of support and required legislation is making its way through parliament.

Many of Fonterra's 10,500 shareholders have already voted by internet or post. The meetings are expected to take more than two hours. Voting results are not expected to be known till later this afternoon.

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- BusinessDay.co.nz

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