Wellington, Sept 7 - New Zealand cooperative Fonterra Ltd, the world's biggest dairy exporter, will propose new ways to beef up its balance sheet, but has ruled out any prospect of a share market listing.
The company said it would shortly start consulting its around 10,800 farmer shareholders about its capital structure, but that would not include opening up ownership to the public.
"Many of our shareholders have made it clear they want to retain 100 percent farmer control and ownership of their Co-operative," said Chairman Henry van der Heyden in a statement released on Saturday.
He said any share market plan had no chance of gaining the necessary 75 percent support needed and to propose it would be a waste of time and a distraction to other issues.
A restructuring plan was put forward in 2007 to list up to 35 percent of a company owning all of Fonterra's processing and overseas operations. The plan was worth around NZ$2 billion ($1.4 billion) but was strongly opposed by farmers and the plan scrapped in March 2008.
Van der Heyden said a plan to beef up Fonterra's balance sheet for the immediate future, but not involving a sharemarket listing, would be put to farmers in the next two weeks.
"This is the most important conversation we've had in our Co-operative since we formed Fonterra in 2001," he said.
Fonterra's shares are currently tied to milk production and falls in production reduce the amount of equity and increase debt levels.
It also needs to cope with farmers getting out of the industry and cashing up their shares, and to fund expansion.
The cooperative, whose brands include Anchor and Fresh n'Fruity, wants to increase its operations overseas, where it competes with global food conglomerates such as Nestle , Kraft Foods Inc and Danone .
Fonterra has said it still expects to pay NZ$4.55 per kilogram of milk solids for the 2009/10 season, down 12.5 percent on the previous season. It has said weak global prices, a higher currency and a return to trade subsidies are combining to hit returns.
Last week it reported a 24 percent rise in prices at its monthly milk powder auction, which it said was a sign that the world dairy market was stabilising after a year of sharp decline.
The group, which controls around a third of the world's dairy exports and generates about 7 percent of New Zealand's gross domestic product. ($1=NZ$1.45)