Bruce Sheppard has done a very good piece analysing whats up at Fonterra.
It's Here and its well worth a read.
So what is the real picture of Fonterras finances , and just what does it mean for New Zealand?
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Saturday, 21 February 2009
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Very perceptive piece by Bruce Sheppard.
The comments display the head-in-the-sand reaction of those with a vested interest.
Fonterra, and NZ Dairy Company before it, has always feared the company shares becoming worth too much. This "problem" means the company has to find enough funds to pay out to farmers leaving the industry, for one reason or another. A competitor setting up in a good Fonterra catchment area is the worst scenario. Fonterra is probably expecting a run of shareholders cashing out, and Bruce Sheppard picks up on this. This bond issue partly addresses this and defers what otherwise could have become a tipping point for the shareholders who remain with the company.
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