Fonterra, the New Zealand-based dairy cooperative, has announced its plan to set aside $50 million for a share buyback program as part of its capital management strategy. The program is expected to commence in late August 2023.
According to CEO Miles Hurrell, the objective of the buyback is to enhance shareholder value. Any decision to repurchase shares will be carefully considered alongside other investment opportunities available to Fonterra.
The buyback program is anticipated to run for up to twelve months, although Fonterra retains the right to suspend or terminate it at any time without prior notice.
Within the $50 million limit, the maximum number of Co-operative Shares that may be acquired through this buyback is set at 77 million. This limit has been established in compliance with section 65 of the Companies Act. It represents no more than 5% of the shares currently in circulation as of twelve months prior to the acquisition of shares, excluding any other shares purchased under section 65 during the previous year.
This limit encompasses shares obtained in the earlier $50 million buyback, which commenced on June 30, 2022, as well as shares acquired in the Transitional Buyback.
Further details regarding the buyback program will be disclosed by Fonterra next month. The company aims to provide clear and comprehensive information to shareholders and the public.
In summary, Fonterra’s decision to allocate $50 million for a share buyback demonstrates its commitment to enhancing shareholder value and ensuring effective capital management. The program is expected to begin in late August 2023 and will operate for up to twelve months. Fonterra will provide additional information in the coming weeks to keep stakeholders informed.
