Fonterra shareholders will vote later this month on a proposal to allow them to trade shares among themselves
The Fonterra Shareholders Council has recommended a special meeting be called on June 30 to consider the proposal, the third and final phase of the capital restructuring of the dairy co-operative.
Council chairman Blue Read said the council saw the proposed changes as an opportunity to advance both Fonterra and the dairy industry, and a vote would allow Fonterra to begin planning.
He said trading among the co-operative's 10,000 shareholders would reduced redemption risk for Fonterra and give shareholders greater flexibility in managing their shares.
That in turn would allow Fonterra to concentrate on its performance, to the benefit of all shareholders, he said.
If approved by 75% of shareholders, this will complete Fonterra's capital restructuring programme, which started with the rejection several years ago of a partial float.
More than 90% of shareholders voted in favour of allowing shareholders to hold shares up to 120% of their milk production, and valuing shares in the co-operative taking into account they can be owned only by farmer-suppliers.
Farmers must own one Fonterra share for every kg of milk solids produced, which meant a wash-up of shares every year, depending on production.
The changes to date remove that annual share exchange and if this latest step is taken, it will relieve Fonterra of the responsibility of administering that share exchange, a function which would be overseen by a new entity, the Fonterra Shareholders Market.
Opposition to the third stage has been led by competing dairy companies, which warn the limited market could lead to a collapse in share price, but among Fonterra shareholders there is little obvious revolt.
Mr Read said his council was satisfied proposed shareholding caps and other limits would safeguard the interests of supplying shareholders and of the co-operative.
