fbpx
Print this page
Saturday, 22 December 2018 08:55

Ex-director suggests Fonterra suspends dividends

Written by  Sudesh Kissun
Greg Gent believes Fonterra should look at suspending dividend payments rather than selling assets. Greg Gent believes Fonterra should look at suspending dividend payments rather than selling assets.

A former Fonterra director says the co-op could suspend dividends to shore up its balance sheet rather than sell key assets.

Greg Gent says farmers and investors would understand if the co-op suspended dividends to get its books in better shape. And it could suspend dividends and sell some assets that don’t align with its new strategy.

However, he wants to see the co-op’s strategy before decisions are made on selling assets.

“The co-op must first have a strategy and then sell assets that don’t co-relate to the strategy,” he told Rural News. “I haven’t seen a strategy, but I’m not on the board any more.”

Fonterra’s new chief executive Miles Hurrell is hoping to reduce the co-op’s debt by $800m this year; asset sales are to help achieve this target.

The co-op is looking at offloading its disastrous investment in Chinese food company Beingmate and the sale of its iconic ice cream brand Tip Top.

Earlier this month, Fonterra chairman John Monaghan announced it was looking at selling Tip Top.

The co-op has appointed FNZC as an external advisor to work with as it considers a range of options.

“We want to see Tip Top remain a New Zealand based business and this is being factored into our options.

“While performing well, Tip Top is our only ice cream business and has reached maturity as an investment for us. To take it to its next phase successfully will require a level of investment beyond what we are willing to make.”

But Fonterra’s announcement triggered angry response on social media. A petition was launched by Taranaki farmer Matthew Herbert to block the sale of Tip Top; over 5000 people have signed it online so far. 

The petition says Fonterra is looking at selling its Tip Top ice cream brand.

“Kiwi’s eat more ice cream per person than any other country on earth,” it says.

“Tip Top ice cream is one of the biggest links between fresh New Zealand milk from Fonterra farmers and people who live in our cities. Sign the petition and help farmers save Tip Top from the chopping block! Lets tell Fonterra to hold onto Tip Top and keep our delicious ice cream going from farm to freezer.”

More like this

Fonterra posts solid results

Fonterra has delivered a solid half-year result, thanks to higher margins and sales volumes across the co-op's diversified product and category mix.

Featured

Dairy sheep and goat turmoil

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Hurry up and slow down!

OPINION: We have good friends from way back who had lived in one of our major cities for many years.

Editorial: Passage to India

OPINION: Even before the National-led coalition came into power, India was very much at the fore of its trade agenda.

National

Knowing bugs means fewer drugs

A mastitis management company claims to deliver the fastest and most accurate mastitis testing available at scale for New Zealand…

Machinery & Products

100 years of Farmall Tractors

Returning after an enforced break, the Wheat and Wheels Rally will take place on the Lauriston -Barhill Road, North-East of…

JD unveils its latest beast

John Deere has unveiled its most powerful tractor ever, with the launch of the all new 9RX Series Tractor line-up…

Biggest Quadtrac coming to NZ!

In the biggest announcement that Case IH Australia/New Zealand has made around its tractor range, its biggest tractor is about…

A different shade of blue for Norwood

Norwood and ARGO Tractors, the Italian manufacturer of Landini and McCormick tractors, have announced an agreement that gives Norwood exclusive…

Kubota tests diesel engines

Kubota last month used the UK LAMMA Show to test the water with its new 200hp, four-cylinder 09-series diesel engines.