Are there any other options or alternatives that you think should have been considered?
Options that split the Co-operative This option would see the Co-op split into core processing assets that farmers would continue to wholly own, and a separate “value-add” entity that external investors could invest in. Only farmer owners would hold shares in the core processing assets which could have a nominal value (noting this may not be achievable under the current regulatory environment). Farmer owners and external investors could hold shares in the separate value-add entity. We removed this option from further consideration because of the operational and transitional complexity it would introduce, and because of the potential for misalignment between external equity and farmer interests, and pressure to sell down the farmer stake in the value-add entity over the long-term. Options that provide flexibility and retain the Fund Earlier in the process we considered options that created more flexibility but retained the Fund. These options were a Dual Share structure with Fund and a Reduced Share Standard structure with a larger Fund. These options were discounted on the basis that the non-compulsory investment shares would likely be sold into the Fund over time, and the Fund size would grow significantly, risking farmer ownership and control. We also explored a 1:2 share standard, but this was considered unlikely to provide the level of flexibility required by farmers and would also likely result in the Fund size growing significantly, risking farmer ownership and control. B
SPLIT CO-OPERATIVE MODEL
FARMERS
B Tradeable investment shares
A Nominal shares
EXTERNAL INVESTORS
“Core”
Separate value-add entity
B
DUAL SHARE + Fund
EXTERNAL INVESTORS
FARMERS
Units
A Nominal supply shares
B Tradeable investment shares
FSF
REDUCED SHARE STANDARD + Fund
EXTERNAL INVESTORS
FARMERS
Fund size capped at 30%
Units
Tradeable shares 1:2 share standard
FSF
29
Made with FlippingBook - Online catalogs