You shall go to the ball, Cinderella
Quote:
Originally Posted by
Dr_Who
So the farmers dont wanna list on the market, how will they pay for a huge capital raising by Fonterra? The rural sector is leveraged to the max, I assume.
I, for one was looking forward to buying some Fonterra shares in the IPO.
Hey, average NZers should have the opportunity to participate in NZ's largest industry.
Dr Who, you WILL be able to participate in a listing - it will just take more time. It is inevitable that there will be a public offering.
I think it has been forgotten that this has been brewing for nine years now - with a slow, often glacial march towards listing.
Consider the history - it was the Dairy Board that heavily lobbied government to disestablish the board - not the other way round. The first real change was the amalgamation of the remaining big dairy cos - Kiwi and NZDG - That got rid of any other board and CEOs other than that vested with Fonterra - now it has centralised control of the supply chain from 'cow to customer'. Simultaneously, the number and depth of 'joint ventures' overseas was ramped up. Experiments were tried with developing parts of the business into consumer and end market operations - sometimes successful, sometimes a total failure - but again, it is a slow and relentless march away from a bulk commodity supplier with large fixed contracts to direct market placement.
Over that period of time, the product mix changed as well - no longer suited to the 'marketing Board' model and more suited to a company that should be structured like the Nestles and Krafts.
This change has been a long evolution - (for good reason - in that if the farmers had realised that the present situation would occur - they would not have let the companies amalgamate and might have realised what was actually happening) - but because it has been over a long time, the multiple big changes that have already occurred are not too noticeable - - thus the listing or partial float or whatever vehicle that will be used to give Fonterra a 'normal' equity structure is in reality not that big.
Whatever happens - they will find a way of succeeding. It was always in the plan.
Dumb question time from a non rural person
How do these payouts work.
Are what they are saying that this is expected to be the average price /payout over the year.
As the price keeps changing, Now i'm sure the farmers do not get paid out once at the end of the year??