On-line voting on whether or not Fonterra shares can be traded among suppliers closed on Monday, shareholders have a last chance to vote, in person, at meetings being held this morning.
I’ll be surprised if the vote isn’t in favour of the proposal.
Allowing shareholders to trade shares amongst themselves rather than through the company makes sense. It reduces the redemption risk the company now has in having to buy shares from suppliers who leave the co-operative.
Another part of the proposal is for a Fonterra Shareholders’ Fund which would issue units to the public to buy share rights from farmers. They would get benefits from distributions and changes in market value, but wouldn’t get voting and milk payment rights.
This would give the company an injection of capital without any loss of control by suppliers.
Some might wonder why anyone would want shares without the right to vote. But if voting records in most public companies is a guide, a whole lot of people own shares in lots of enterprises now without ever exercising their right to vote.