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Fonterra's plan will leave farmers with stranded assets

Jenny Ruth
Mon, 15 Nov 2021

Fonterra's plan will leave farmers with stranded assets
We all know what happens to turkeys at Christmas. (Image: Getty)
Jenny Ruth
Mon, 15 Nov 2021
In 2012, when Fonterra listed its shares and units in the Fonterra Shareholders Fund on the NZX, it solved a major headache it had previously faced: redemption risk.Each dairy farmer had to own one Fonterra share for every kilo of milk solids they produced. Before the listing, Fonterra was selling farmers shares when they increased production and buying the shares back when a farmer's production declined.Fonterra had constantly faced an unknown degree of liability, which the listing removed by transferring it to its farmer shareholders...

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