Silver Fern Farms looks like getting the required 75% shareholder support for its capital restructuring proposal.
Farming and company leaders spoken to yesterday said shareholders realised SFF needed extra capital and were supportive of its marketing and branding strategy, governance changes and moving to a share value which reflected the company's performance and value.
Meat Industry Action Group chairman John Gregan was confident shareholders supported the proposal and said turning to them for new capital was more appealing to him than last year's failed partnership with rural servicing company PGG Wrightson.
"Farmers realise they [SFF] need new capital to strengthen their balance sheet and believe the first port of call should be supplier-shareholders."
Last year's shareholder support for the PGG Wrightson partnership was likely to translate to support for this proposal, he said.
Mr Gregan said he supported SFF's proposed governance changes, which would bring a better skill balance to the board table, the launch of its plate-to-pasture marketing strategy and a share value that was tied to the performance of the company.
SFF hopes to raise $80 million through a bonus share and cash issue, which would see its shares tradeable on the Unlisted exchange.
Shareholders who transfer their rebate and supplier investment shares to a new class of "ordinary shares" would retain control by constitutional protection, which reserved 60% of the voting power.
The proposal would also see an end to the ward system to elect farmer-directors, and the board reduced from 12 directors to eight.
Five of those, including the chairman, would be elected by farmers, and the remaining three appointed based on their strategic, financial and marketing expertise.
SFF has said the new capital would reduce the need for debt financing, fund a marketing and branding strategy and provide investment in new processing technology.
Mr Gregan said his only reservation was having non-suppliers able to own shares in the company.
He still hoped the two co-operatives, SFF and Alliance Group, would one day merge and said having outside investors could hamper that, as well as create tension as the company balanced dividends for investors with livestock prices.
Fonterra's fair value share, which was independently assessed twice a year, was a model SFF should look at, as it ensured suppliers owned the company and the share value reflected its performance, he said.
SFF chairman Eoin Garden was also buoyed by support at shareholder meetings, saying the positive reaction was beyond his expectations.
