Largest dairy exporter seeks investors
The Fonterra Shareholders’ fund will sell units at NZ$4.60 to NZ$5.50 apiece, valuing New Zealand’s largest company at between NZ$7.4bn and NZ$8.7bn, it said in an offer document released yesterday. The units, which track the company’s financial performance, will be offered to existing stakeholders on Nov 5 and are likely to begin publicly trading on Nov 30.
The fund will give global investors their first access to the 10,500-member co-operative that collects almost 90% of New Zealand’s milk.
Fonterra says the sale will help free up its balance sheet and allow more of its spare capital to be invested in growth markets such as China and India.
“It is a historic day for the co-operative,” said chairman Henry van der Heyden in a separate statement.
“The fund provides a unique opportunity for the public to gain exposure to the financial performance of Fonterra and the global dairy industry,” he said.
The fund is a core component of Fonterra’s Trading Among Farmers plan, which will allow its members to privately trade shares or sell them to the fund. While the units will be linked to Fonterra’s dividend flows and earnings, they carry no voting rights or entitlement to the farmers’ milk payout.
Auckland-based Fonterra, which accounts for about 40% of the global trade in dairy products, forecasts the global dairy market will increase at least 100 billion litres by 2020, led by China, India, and the Middle East-Africa region. New Zealand output will rise about 5 billion litres in that period.
The company sees net profit after tax of NZ$690m, the offer documents show. Earnings before interest, tax and one-time items rose 2.3% to NZ$1bn in the year ended Jul 31, the company said last month.
Full-year sales were NZ$19.8bn and the dividend payment was 32 cents a share. Fonterra is seeking to raise a minimum of NZ$5m from the fund.
— Bloomberg
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