AN overwhelming majority of Murray Goulburn Co-operative (MG) members have voted in favour of a capital restructure that will establish a unit trust to be launched on the Australian Stock Exchange (ASX).
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Chairman Philip Tracy announced that a “very impressive” 50 per cent of eligible members voted - and of them, 92pc voted in favour of the capital restructure, which the board had suggested.
He said the vote was a milestone decision for the co-operative.
He said the capital structure the board recommended was a vital step towards ensuring MG had the strong foundation and stable capital base it needs to pursue the next generation of growth opportunities and deliver a sustainable increase in the farmgate milk price for suppliers.
“Over the past 18 months we have held five rounds of supplier meetings to discuss and hear direct feedback from suppliers on the capital structure. These meetings were invaluable and have led to a number of aspects of the capital structure being further developed or refined,” he said at the opening of the meeting.
Most voters submitted their preferences by proxy, but of the suppliers in attendance, most expressed their support, sometimes tentative, of the restructure.
Bernhard Lubitz, who milks 230 cows at Leongatha, said caution was needed.
“It seems the right direction to go, but we need to be careful,” Mr Lubitz said.
“My biggest concern is that the structure could block new suppliers.”
MG managing director Gary Helou reiterated that the capital restructure would allow the company to raise $550-$635 million needed to invest in its dairy food manufacturing operations. He said the investment would help the company be more efficient and have improved flexibility to adapt to changing consumer demand.
The main areas of investment will be into higher value products, including nutritional powders, dairy beverages and consumer cheese.
Mr Helou said such a strategy would buffer MG from the volatility of bulk export commodities, and would ultimate improve farmgate milk prices.
