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Fonterra may have to redeem more shares in the coming year than thought due to lower milk production, says NZ Farmers Weekly editor Tim Fulton.
"Milk production is down, somewhere near static for the season so we're going to have a scenario somewhat equivalent to last year," says Fulton.
Last year the dairy co-operative lost $600 million worth of share capital, though Fulton does not expect the loss in the coming year to be as great, perhaps in the order of $300 million.
"One of the Fonterra people said this is basically like a burning bridge when we're talking share redemptions for the co-op, it's something needs to be addressed," he says.
In July it was reported that Fonterra would undertake capital restructure as it looks to grow capital and possibly list on the stock exchange.
It is understood that the proposed capital restructure process
will be carried out in up to four stages and that farmers may cast
their first vote at Fonterra's meeting in November.
