Fonterra CFO Jonathan Mason said Fonterra had used external advisers to assist it in developing the initial proposal for Trading Among Farmers – in particular, to support the goal of a deep and liquid market for the trading of Fonterra shares among farmer-shareholders.
Mason confirmed that Fonterra was working with external advisers with specific capital markets experience, including First NZ Capital-Credit Suisse and Deutsche Bank-Craigs Investment Partners.
“We will be accessing professional advice from a range of advisers as we move through the various stages leading up to the introduction of Trading Among Farmers,” said Mason. “This specialist expertise will be essential as the Co-operative develops the technical details for a new Fonterra Shareholders’ Market and Fonterra Shareholders’ Fund.”
Fonterra has also appointed NZX to help design the trading platform for the Fonterra Shareholders Market.
“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,” said Mason. “Fonterra will be using NZX in much the same way as we used CRA to design globalDairyTrade.”
NZX was appointed through a contestable process and was chosen because of its experience in designing and building trading markets, as well as its knowledge of local conditions and the local regulatory environment.
“The details of how Trading Among Farmers will work in practice are still at a preliminary design stage and it’s too early to speculate on what shape the market will take,” said Mason. “Trading isn’t expected to begin until late in 2011 at the earliest.”
Fonterra farmer shareholders endorsed changes at a special meeting in June that authorised the Co-operative to take the necessary next steps to develop the details to allow Trading Among Farmers.
Source: Fonterra
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