The backflip was part of a 12 page letter the co-operative sent to suppliers yesterday afternoon providing more information about its capital structure proposal first floated at the annual general meeting last November.
The document said it would not be compulsory for suppliers to be “shared-up”, own one share for each kilogram of milk solids supplied, from the first day of the proposed new structure.
Previously this was a requirement, but MG’s information said those who do now “share-up” will stay on a share offtake arrangement similar to the current share offtake arrangement until they reach the required share amount.
“No suppliers, including young suppliers, will need to share-up immediately,” the information said.
MG also said the farmgate milk price would remain its primary objective.
“MG proposes to pay similar dividends to today when the (farm gate milk price) is in the lower range and only pay higher dividends (to shareholders and unit holders) when the FMP is higher,” it said.
“MG will not adopt a Fonterra-style milk price formula.”
MG also said it had met with major bankers to the dairy farm sector and received “preliminary support” for the proposal.
A preliminary time table was also attached to the supplier document and indicated, if passed, the new capital restructure would be implemented in March-April 2015.
Prior to this MG has proposed an extraordinary general meeting for January-February next year.
Supplier meetings begin at Kiewa on Monday.
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