Capital Structure Consultation 2021

CURRENT STRUCTURE The key features of our current structure are outlined in Section 4. Under our current structure, if milk supply declines to the extent suggested by the scenarios, Fund size limits would likely be exceeded. This would mean that the Co-op would need to take action

such as an ongoing programme of share buy-backs to maintain the Fund within the thresholds set out in our Constitution. Buy-backs mean that we would have an uncertain demand on our capital, which compromises our ability to invest in strategic initiatives to grow value for shareholders. If we didn’t buy back shares, we may need to increase the Fund size limits, which could put farmer ownership and control of our Co-op at risk. If we do not have enough farmer owner support for change, we can continue with our current structure for a period of time, but the challenges identified will ultimately need to be addressed if milk supply declines to the extent suggested by the scenarios. This is why it is so important that we hear your feedback on the options.

What are your views on the Dual Share structure?

CURRENT STATE TAF

EXTERNAL INVESTORS

FARMERS

Units

Tradeable shares

FSF

What are your views on retaining our current structure?

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