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GlobalCo Rules, OK?

Greetings Readers

The complex technical document setting out the "rules" of GlobalCo subsequent to merger will be in the hands of all dairy farmers.

This document is the substance of the way GlobalCo will operate with its supplying shareholders post merger. Much focus in the press has been on the scale of the merger and the need for Commerce Commission approval. But now farmers must attend to the real detail and leave the politicking for others.

From the supplying shareholders point of view this is the document that cements in the proposed equity of the new relationships between them and the cooperative.

Not only do the shareholders need to look at the equity of the relationships between the company and suppliers in the form of payout and the new shareholding structure but it also identifies the formula for the distribution of capacity notes between suppliers.

Suppliers will need to use their own figures to identify the equity of the share and capacity note allocation according to their 'good' production curve but make comparison with how others with a 'bad' or 'better' production curves. It could be that producers with a current high peak will be given an advantage over those with a current flatter production curve. And these are capacitynotes that will be tradeable in the future.

It is a critical document and sets out some innovative ways to manage the difficult restraints presented by the threat of Commerce Commission review.

If you have not seen the document it is available here: http://www.globaldairy.co.nz/merger_info_package/merger_info_package.html

Good farming




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