The proposal includes a bonus share and cash issue which will see the shares tradeable on the unlisted exchange.
Silver Fern Farms (SFF) chairman Eoin Garden stressed that non-supplier shareholders could never gain more than 40% of the votes in the company.
"Therefore, farmer control is protected by virtue of 60% of voting power retained by livestock-supplying shareholders," Mr Garden said.
Mr Garden said capital was needed to reduce reliance on debt, to strengthen the balance sheet and to implement a new marketing model he said would make the company and farmer suppliers' operations more profitable.
Debate included whether the company's current co-operative model could raise the required capital.
Former PPCS director Lindsay Alderton said when the company took over Richmond, supposedly owned by Hawkes Bay farmers, the share register showed it was heavily owned by investors outside the region and outside the industry.
This could lead to conflicting interest between rewarding suppliers and providing a competitive rate of return to outside investors, he said.
One shareholder said that retaining dividend-paying shares in the company when he had retired appealed to him.
Chief executive Keith Cooper said the annual interest bill of about $34 million was a drain on the company, and he estimated that initially 60% of profits could be paid as dividends, rising to 80% as the debt-equity ratio improved.
There was also debate about what a co-operative was and whether suppliers expected to have their shares appreciate in value.
South Otago farmer Mike Elliot said co-operatives had a variety of structures and he congratulated the board for the model being proposed.
He and several other speakers asked why the board had not sought fresh capital from shareholders instead of pursuing last year's failed partnership with rural servicing company PGG Wrightson.
Mr Garden said after three lean farming years, most would have been reluctant to invest.
