Dairy Equity Limited (Dairy Equity) is an investment company established in 2006, to provide its shareholders with an investment exposure to New Zealand’s dairy industry by acquiring the beneficial ownership of Fair Value Shares in Fonterra Co-operative Group Limited.
Historically, the only means of investing in Fonterra was to purchase a farm and supply milk to the company. Via Dairy Equity, the general public now also has the ability to invest in the dairy industry and New Zealand’s largest company.
Similarly, Dairy Equity enables dairy farmers supplying milk to Fonterra to have choice over the level of their investment in Fonterra. Farmers can ‘unbundle’ the capital they have tied up in Fonterra fair value shares. Suppliers to Fonterra are required to hold one fair value share for each kilogram of milk solids they supply.
Dairy Equity has developed a contractual agreement (called a SWAP agreement) whereby farmers can transfer to the company the beneficial ownership of some or all of their shares – while retaining both their supply and voting rights.
The equity they release from the transfer of beneficial ownership can be used by the farmer for such things as purchasing or developing a farm; off-farm investments; retirement or passing a family-owned farm to the next generation.
Dairy Equity is managed by DEL Management Limited, a company owned 50/50 by ABN AMRO Craigs and GT & Company – a specialist dairy industry fund management company.
Visit
www.dairyequity.co.nz for more information on the company and the opportunity for investors and farmers alike.