CAPITAL STRUCTURE CONSULTATION 2021
COMPARING THE PREFERRED OPTION TO OUR CURRENT STRUCTURE FOR FARMERS Every farmer’s situation would be unique
indication of how things could change at different stages of your business life cycle. Note that these are on the basis that any transition to the preferred option has been completed.
if we were to evolve our structure to a Reduced Share Standard with either No Fund or a Capped Fund. But the hypothetical scenarios below are designed to give you a high-level
SCENARIO
CURRENT STRUCTURE
PREFERRED OPTION
FIRST FARMOWNER » Planning to produce 80,000 kgMS » Holding no shares or units
» Minimum shareholding requirement: 80,000 shares » Maximum shareholding: 160,000 shares » Flexibility: – Purchase 80,000 shares over three seasons during the share-up period – Apply for a Share-Up Over Time contract and commit to supply the Co-op for the term (e.g. 6 years), and pay a contract fee (currently 5c/kgMS) for non-share-backed supply – Supply MyMilk under contract with no shareholding requirement, and pay contract fee on all supply (currently 5c/kgMS) for up to five seasons – Invest further in the Co-op and hold up to 160,000 shares » Voting: 80 votes if 80,000 or more shares held » Minimum shareholding requirement: 160,000 shares » Maximum shareholding: 320,000 shares » Flexibility: – Purchase remaining 60,000 shares for second farm over three seasons during the share-up period – Apply for a Share-Up Over Time contract
» Minimum shareholding requirement: 20,000 shares » Maximum shareholding: 320,000 shares » Flexibility: – Purchase 20,000 shares over five seasons during the share-up period – Invest further in the Co-op and hold up to 320,000 shares » Voting: 20 votes if 20,000 shares held; 80 votes if 80,000 or more shares held
» Minimum shareholding requirement: 40,000 shares » Maximum shareholding: 640,000 shares » Flexibility: – Sell up to 60,000 shares to free up capital, (e.g. for second farm investment) – Invest further in the Co-op and hold up to 640,000 shares » Voting: 40 votes if 40,000 shares held; 160 votes if 160,000 or more shares held
GROWING FARM OWNER » Average production
on first farm is 80,000 kgMS
» Second farm expected to produce 80,000 kgMS » Holding 100,000 shares
for 60,000 kgMS, but would need to commit to supply for the term, and contract fee (currently 5c/kgMS) for non-share-backed supply
– Supply MyMilk from second farm under contract with no shareholding requirement, subject to contract fee (currently 5c/kgMS) and potentially sell 20,000 shares to free up capital for on farm investment – Invest further in the Co-op and hold up to 320,000 shares » Voting: 160 votes if 160,000 or more shares held
10
Made with FlippingBook - Online catalogs