Fonterra Co-Operative Group Limited
[2023] NZHC 2118
•9 August 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1064
[2023] NZHC 2118
UNDER Part 15 of the Companies Act 1993 IN THE MATTER OF
An application for orders approving a scheme of arrangement under part 15 of the Companies Act 1993
BETWEEN
FONTERRA CO-OPERATIVE GROUP LIMTIED
Applicant
Hearing: On the papers Appearances:
K M Massey and H M Bain for the Applicant
Judgment:
9 August 2023
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 9 August 2023 at 4.30 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Russell McVeagh, Auckland
RE FONTERRA CO-OPERATIVE GROUP LTD [2023] NZHC [2118]
Introduction
On 26 May 2023, Fonterra Co-operative Group Limited (Fonterra) filed an originating application for orders approving a scheme of arrangement between Fonterra and its shareholders under part 15 of the Companies Act 1993 (Scheme). The Scheme is intended to return approximately $800 million of capital to shareholders by way of share repurchase and cancellation together with contemporaneous share subdivision so that following the return of capital, the shareholders will still hold the same number of shares.
I made Initial Orders on 9 June 2023 to facilitate service and the consideration of and voting on the Scheme by Fonterra’s Shareholders (9 June Judgment).1 The 9 June Judgment details the background and rationale for the Scheme.
At Fonterra’s request, the Initial Orders were amended in certain respects by my minute dated 11 July 2023. In this judgment references to the Initial Orders are to the Initial Orders as revised on 11 July 2023.
The Initial Orders included orders directing Fonterra to:
(a)convene a special meeting of Shareholders in order for shareholders to consider and vote on the Scheme (Scheme Meeting);
(b)at the Scheme Meeting, put forward for Shareholders’ consideration a resolution approving the Scheme (Resolution); and
(c)in advance of the Scheme Meeting, distribute certain materials to Fonterra’s Shareholders informing them about the Scheme, notifying them of the Scheme Meeting and providing instructions as to how to vote (whether at the Scheme Meeting, online or by post) (Shareholder Materials).
1 Re Fonterra Co-operative Group Ltd [2023] NZHC 1438. See definition of Shareholders at [9]. Other capitalised terms are as defined in this judgment or in the 9 June Judgment.
Fonterra’s Shareholders have now voted on the proposed Scheme with 99.24 per cent of the Shareholders entitled to vote and voting on the Resolution voting in favour of the Scheme, well in excess of the threshold of 75 per cent for approval required by the Initial Orders.
No notice of opposition or appearance has been filed or served in accordance with the timetable set out in the Initial Orders or at all.
Following a request from counsel for Fonterra, I issued a minute on 8 August 2023 vacating the hearing for the Final Orders Application scheduled for today, 9 August 2023, and instead determine the application on the papers.
I begin by setting out the relevant legal principles before applying the principles to the application to determine whether the Scheme ought to be approved.
Relevant legal principles
The provisions relating to schemes of arrangements are set out in part 15 of the Companies Act 1993. Section 236(1) of the Companies Act provides the Court with a discretion to approve a scheme of arrangement as follows:
236 Approval of arrangements, amalgamations, and compromises
(1) Notwithstanding the provisions of this Act or the constitution of a company, the court may, on the application of a company or any shareholder or creditor of a company, order that an arrangement or amalgamation or compromise shall be binding on the company and on such other persons or classes of persons as the court may specify and any such order may be made on such terms and conditions as the court thinks fit.
“Arrangement” is defined in s 235 for the purposes of part 15 as:
arrangement includes a reorganisation of the share capital of a company by the consolidation of shares of different classes, or by the division of shares into shares of different classes, or by both those methods.
As discussed in my 9 June Judgment, “arrangement” has been interpreted broadly, with the Court of Appeal holding that:2
… there is no ground for limiting the meaning in a section empowering the Court to approve an arrangement, and any risk is sufficiently guarded against by the fact that the sanction of the Court must be obtained.
Returns of capital through the cancellation of shares on a pro-rata basis in consideration for cash payment for every share cancelled have been held to constitute arrangements for the purposes of s 236. The Court has approved a number of such schemes.3
The four step test to be applied by the Court in determining whether to exercise the s 236(1) discretion is well established, summarised in Re Auckland International Airport by Winkelmann J as follows:4
[8] The principles to be applied to an application for sanction of arrangement under part 15 of the Act are as stated in the decision of Smith J in Re CM Banks Ltd 5now as supplemented by Weatherston v Waltus Property Investments Ltd.6 In CM Banks Ltd Smith J formulated a four step test as follows:7
(a)that there has there been compliance with the statutory provisions as to meetings, resolutions, the application to the Court, and the like;
(b)that the arrangement has been fairly put before the class or classes concerned, and that if a circular or circulars have been sent out, the circular gave all the information reasonably necessary to allow the recipients to judge and vote upon the proposals;
(c)that the class was fairly represented by those who attended the meeting, and that the statutory majority are acting bona fide and are not coercing the minority in order to promote interests
2 Suspended Ceilings (Wellington) Ltd v Commissioner of Inland Revenue [1995] 3 NZLR 143 (CA) at 148.
3 See Re Auckland International Airport [2014] NZHC 405; Re Kirkcaldie & Stains Ltd [2016] NZHC 112; Re Tenon Ltd [2016] NZHC 2947; Re New Zealand Oil & Gas Ltd [2017] NZHC 809; Re Tenon Ltd [2017] NZHC 674; Re PGG Wrightson Ltd [2019] NZHC 1780; Re Tilt Renewables Ltd [2020] NZHC 1398; and Re Tower Ltd [2022] NZHC 328.
4 Re Auckland International Airport, above n 3, at [8]–[9] and see more recently Re PGG Wrightson Limited, above n 3, at [12] as applied in, for example, Re Tilt Renewables Ltd, above n 3, at [6] and Re Tower Ltd, above n 3, at [8].
5 Re CM Banks Ltd [1944] NZLR 248 (SC).
6 Weatherston v Waltus Property Investments Ltd [2001] 2 NZLR 103 (CA).
7 Re CM Banks Ltd, above n 5, at 253.
adverse to those of the class whom they purport to represent; and
(d)that the arrangement is such that an intelligent and honest person of business, a member of the class concerned and acting in respect of his or her interests, might reasonably approve.
[9] In Weatherston v Waltus Property Investments Ltd the Court of Appeal held that it was appropriate to supplement the test of an intelligent and honest business person by consideration of whether the arrangement is fair and equitable, because it was implicit in the test of the intelligent and honest business person that the arrangement was also fair and equitable.8
I now go through the four part test to determine whether the discretion should be exercised in respect of the Scheme in this case.
First step: have the relevant statutory provisions been met?
I am satisfied Fonterra has complied with all applicable statutory provisions under part 15 of the Companies Act. Further affidavits have been filed in support of the Final Orders Application to confirm compliance with the Initial Orders as follows:
(d)a second affidavit by Michael Rex Cronin, the Managing Director of Cooperative Affairs for Fonterra, affirmed on 28 July 2023;
(e)an affidavit by Peter James McBride, the Chair of Fonterra, affirmed on 26 July 2023;
(f)an affidavit by Andrew Douglas Stewart of Electionz.com, affirmed on 28 July 2023 (Mr Stewart was the scrutineer of the shareholder vote in relation to the Scheme); and
(g)an affidavit by Erin Rose Gatenby, a solicitor employed by Russell McVeagh, affirmed on 31 July 2023, confirming Fonterra's compliance with certain remaining obligations set out in the Initial Orders.
(together, Further Affidavits)
8 Weatherston v Waltus Property Investment Ltd, above n 6, at [35].
The original and Further Affidavits filed confirm:
(h)the Scheme Meeting was held in accordance with the Companies Act, the Fonterra Shareholders’ Market (FSM) Listing Rules and the constitution of Fonterra; and
(i)Fonterra has complied with the Initial Orders made pursuant to s 236(2) of the Companies Act, including in distributing the Shareholder Materials and making relevant NZX announcements.
Counsel for Fonterra have helpfully attached a schedule to their memorandum dated 31 July 2023 cross-referencing the evidence for Fonterra’s compliance with each of the relevant Initial Orders.
Prior to the Final Orders Application being made, the directors of Fonterra completed a solvency certificate stating that, in their opinion, the company will satisfy the solvency test immediately after payment to each Shareholder of $3.00 for each share cancelled and setting out the grounds for that opinion.
The Takeovers Panel has confirmed its agreement with Fonterra that s 236A of the Companies Act does not apply and therefore the further requirements of that section are not required to be met.
At the time of my 9 June Judgment, the Financial Markets Authority had indicated to Fonterra on a preliminary basis that it considered the share subdivision to be an offer of financial products under the Financial Markets Conduct Act 2013 (FMCA).9 The Financial Markets Authority has now issued a specific exemption under s 556 of the FMCA, exempting Fonterra from complying with the provisions of part 3 of the FMCA in relation to disclosure of offers of financial products, a copy of which is attached to Mr Cronin’s second affidavit. The exemption has been granted on the basis of conditions set out in clause 6 of the exemption which Mr Cronin confirms have to date been met by Fonterra. Mr Cronin further confirms that Fonterra considers it will continue to comply with these conditions on implementation of the Scheme.
9 Re Fonterra Co-operative Group Ltd, above n 1, at [33].
The remaining conditions appear to be that the proposal proceeds by way of the Scheme and that the Scheme becomes effective in accordance with its terms. If I exercise my discretion to approve the Scheme and it is then implemented as Fonterra intends then there appears to be no reason why those conditions will not be able to be met.
For all of the above reasons, I am satisfied therefore that Fonterra has complied with the relevant statutory provisions as required by the first step of the test.
Second step: Has the Scheme been fairly put to Shareholders?
The Initial Orders provided for Fonterra to take a number of steps to ensure that interested parties (particularly Shareholders) were informed of the Scheme and had the opportunity to be heard in respect of it or to oppose it.
The Initial Orders included orders dispensing with service of both the Initial Orders and Final Orders Applications. In doing so, I confirmed that I was satisfied that the Initial Orders would ensure that Shareholders and other interested parties were provided with appropriate information so that Shareholders and other parties would have a proper opportunity to consider and provide their views on the Scheme prior to the determination of the Final Orders Application.10
The Further Affidavits confirm that the Shareholder Materials, including all of the information required by the Initial Orders, were provided to the Shareholders as directed except in respect of 72 non-voting shareholders (Omitted Shareholders). This omission resulted in Fonterra seeking amendments to the Initial Orders, including adjusting the timing of the Scheme Meeting to allow the materials to be provided sufficiently in advance of the meeting to the Omitted Shareholders.
The postponement of the Scheme Meeting from 12 July 2023 to 26 July 2023 as a result of the failure to send the Shareholder Materials to the Omitted Shareholders was notified to Shareholders by lodging an announcement on the NZX announcement platform and also sending a communication to all Shareholders.
10 Re Fonterra Co-operative Group Ltd, above n 1, at [52].
I am satisfied the version of the Shareholder Materials provided to Shareholders was in substantially the same form as the materials annexed to the original affidavits filed with the applications, subject to certain minor amendments detailed at [2.2] of the second affidavit of Mr Cronin, and included the details required by my 9 June Judgment.
The Further Affidavits confirm that Fonterra sent copies of the Shareholder Materials to the 42 persons who became Shareholders with an entitlement to vote after the Shareholder Materials Record Time but before the Voting Entitlement Time.11
The Shareholder Materials were also made available to both Shareholders and other interested parties as required by the Initial Orders by being:
(j)lodged on the NZX market announcement platform;
(k)made available for download from Fonterra’s website;
(l)made available for inspection and removal at Fonterra’s registered office and Russell McVeagh's Auckland and Wellington offices; and
(m)distributed to all of Fonterra's directors and KPMG (Fonterra’s auditor).
Mr Cronin’s second affidavit records that NZX reviewed the updated and finalised Shareholder Materials and confirmed that it had no objection to them as directed in my 9 June Judgment.12
In addition, copies of the Initial Orders (both as made in my 9 June Judgment and revised on 11 July 2023) were made available on Fonterra’s website, and in hard copy at Fonterra’s registered office and Russell McVeagh’s Auckland and Wellington offices.
11 As defined in Initial Order 7.
12 Re Fonterra Co-operative Group Ltd, above n 1, at [39].
As already referred to above, the Takeovers Panel confirmed its view that the Scheme does not involve a change in the relative percentage of voting rights and so s 236A of the Companies Act does not apply.
The Chair of Fonterra, Mr Peter McBride, has filed an affidavit deposing that the Scheme Meeting was held at 10.30 am on 26 July 2023 and that he confirmed that the quorum was met, provided an overview of the Scheme and an opportunity to ask questions, before moving the Resolution. Mr McBride confirms that no questions or concerns were raised. The Resolution was then put to the Shareholders for approval as a single class consistent with Initial Order 4.
Mr Cronin in his second affidavit and Mr Stewart of Electionz.com (which was responsible for processing and counting votes on the Resolution) confirm that both Fonterra and Electionz.com took steps to ensure that only those entitled to vote in terms of the constitution voted on the Resolution. This was a relatively involved process as a Shareholder’s entitlement to vote depends on the milksolids it supplies to Fonterra.13 Mr Cronin goes into some detail in his second affidavit as to the steps taken. It appears from this process that those entitled to vote in terms of the constitution voted on the Resolution.
Mr Stewart confirms that 841,578 votes were cast in favour of the Resolution and 6,640 votes were cast against the Resolution. The total votes in favour of the Resolution as a percentage of total votes of Shareholders entitled to vote and voting on the Resolution was therefore 99.24 per cent.
From all of the above, I am satisfied that the Scheme has been fairly put to Shareholders.
Third step: Was the class of Shareholders fairly represented by those who attended the Scheme Meeting?
In my 9 June Judgment, I held that it was appropriate for an order to be made that the Shareholders belonged to a single class for the purposes of the Scheme. I am satisfied
13 Explained in more detail in Re Fonterra Co-operative Group Ltd, above n 1, at [13] to [15].
that Shareholders were given a sufficient opportunity to be represented at the Scheme Meeting themselves or by proxy, in addition to being able to vote themselves online or by post prior to the Scheme Meeting.
Counsel for Fonterra refers to previous decisions where the Court has held that there are unlikely to be any issues in relation to this third step in the test where the arrangement is a pro-rata return of capital to one class of Shareholders.14
As Fonterra submits, in this case:
(n)no Shareholder has sought to oppose the Scheme at the Final Orders hearing (by filing a notice of appearance or notice of opposition), or otherwise challenge the result of the vote on the Resolution, despite sufficient time to take such steps should they have wished to do so; and
(o)the Scheme was overwhelmingly supported by the Shareholders who voted on the Resolution (99.24% of the votes were cast in favour of the Scheme).
The third step in the test, that the class of shareholders was fairly represented by those who attended the Scheme Meeting, can therefore be said to be satisfied.
Fourth step: Is the Scheme such that an intelligent and honest person of business might reasonably approve it, including that it is generally fair and equitable?
In Re Tilt Renewables Ltd, Muir J held that the fourth step was satisfied after considering whether:15
(p)the return of capital was reasonable in the current circumstances of the business;
(q)the scheme had the unanimous support of the Board;
14 Re Auckland International Airport Ltd, above n 3, at [15]; Re New Zealand Oil & Gas Ltd, above n 3, at [14]; and Re PGG Wrightson Limited, above n 3, at [15].
15 Re Tilt Renewables Ltd, above n 3, at [32] to [47].
(r)the scheme had the overwhelming support of participating shareholders; and
(s)any party was materially prejudiced.
I discuss each of these elements below in terms of the Scheme in this case.
Is the return of capital reasonable in the current circumstances of the business?
The reasons for the return of capital are set out in the first affidavit filed by Mr Cronin and the affidavit of Mr Bruce Hassall affirmed on 24 May 2023 and in the Shareholder Materials distributed to Shareholders as follows:
(t)the divestment of Fonterra’s interest in the Chilean business Soprole resulted in aggregate consideration as at the time of signing of about
$1.055 billion, subject to post completion adjustments;
(u)following consideration of Fonterra’s financial position following receipt of the proceeds of the divestment, the amount of Fonterra’s debt and Fonterra’s earnings outlook, Fonterra determined that it is appropriate to return approximately $800 million to Shareholders; and
(v)Fonterra considers that the Scheme is in the best interests of Shareholders and the preferred option because:
(i)Shareholders’ shareholdings and, therefore, voting rights and compliance with the minimum shareholding requirements in relation to Fonterra’s share standard will not be affected or altered;
(ii)payments to Shareholders will be treated as a return of capital for New Zealand tax purposes;
(iii)the Scheme carries a low level of execution risk, because there will be certainty that the return of capital will proceed once sanctioned by the Court; and
(iv)Shareholders will receive their payments in a timely manner.
In addition to this, the directors have certified that Fonterra will satisfy the solvency test immediately after implementation of the Scheme.
The engagement with regulators has not resulted in any concerns being raised (other than the FMCA exemption , the conditions of which are being complied with) and nor has any opposition to the Scheme been filed or apparently raised.
In these circumstances, I am satisfied the return of capital is reasonable.
Does the Scheme have the unanimous support of the Board?
The affidavits filed confirm that the Scheme has the unanimous support of Fonterra's Board which includes independent directors. As Katz J noted in Re Nuplex Industries, a “Board's judgement obviously must be given significant weight”.16
Does the Scheme have the overwhelming support of participating shareholders?
The fact that the Scheme is overwhelmingly supported by Fonterra’s participating Shareholders supports the position that an “intelligent and honest person of business” might reasonably approve the Scheme.
Mr McBride further confirms in his affidavit that Shareholders were provided with an opportunity at the Scheme Meeting to ask any questions or voice any concerns, but no questions or concerns were raised. Furthermore, the Further Affidavits confirm that neither Fonterra nor Electionz.com have received any correspondence which has raised objections to the Scheme. Both have had queries from Shareholders, including in relation to the process to implement the Scheme, how to vote and voting
16 Re Nuplex Industries Ltd [2016] NZHC 1677 at [25].
entitlements, but these queries did not raise substantive grounds of opposition to the Scheme.
Furthermore, no Shareholders nor any other person filed or served a notice of opposition or a notice of intention to appear at the scheduled hearing (now vacated).
Is any party materially prejudiced?
In previous schemes, as part of the consideration of whether the Scheme is fair and equitable overall, the Court has considered whether approval of the Scheme is likely to prejudice any third party.17
Mr Cronin discusses the impact of the Scheme on Fonterra, Fonterra’s Shareholders and its creditors in his first affidavit. He confirms that Fonterra’s Board has determined, based on the analysis undertaken by Fonterra’s management in relation to the Scheme, that Fonterra is in a position to return capital to Shareholders as proposed whilst preserving long term liquidity and balance sheet strength. As far as the effect on Fonterra’s Shareholders, the Scheme treats all Shareholders equally and this “equality of outcome” was one of the key reasons for Fonterra deciding to proceed with the contemporaneous share subdivision to ensure that each Shareholder would retain the same voting and distribution rights following the implementation of the Scheme. Finally, in terms of the effect on creditors, Mr Cronin confirms that the Board and management of Fonterra have determined that following the implementation of the Scheme, Fonterra will continue to comfortably satisfy the solvency test prescribed by the Companies Act, with a copy of the solvency certificate signed by Fonterra’s directors annexed to his affidavit.
Mr Cronin further confirms that Fonterra has reviewed its financing facilities to ensure that the Scheme will not affect those facilities or require the consent of financiers. Following that review, Fonterra was satisfied that the Scheme would not impact any of its financing facilities or prejudice financiers and so there was no requirement for financier consent to the Scheme. I record that the Scheme has been notified publicly
17 Re Nuplex Industries Ltd, above n 16, at [26]; Re Tenon Ltd, above n 3, at [18]; Re Fliway Group Ltd [2017] NZHC 3216 at [25]; Re Tenon, above n 3, at [16]; Re PGG Wrightson, above n 3, at [24]; Re Tilt Renewables Ltd, above n 3, at [45]; and Re Tower Ltd, above n 3, at [16].
with an opportunity given for interested parties to be heard in respect of the Scheme if any such concerns arose. No such applications have been filed.
Conclusion
Considering all of the above elements in relation to the fourth step, I am satisfied that the Scheme is one that an intelligent and honest person of business might reasonably approve including because it appears to be generally fair and equitable.
Contemporaneous share subdivision
In my 9 June Judgment, I recorded that previous schemes do not appear to have included a contemporaneous subdivision of shares so that each shareholder holds the same number of shares after the scheme has been implemented.18 I commented however that on an initial view this distinguishing factor did not appear to prevent the Scheme being approved. This was because the definition of “arrangement” in s 235 of the Companies Act has been interpreted broadly and s 237 provides the Court with the discretion to make additional orders when approving schemes, including the issue of shares and “[s]uch other matters that are necessary or desirable to give effect to the arrangement...”19
Fonterra submits that the proposed contemporaneous share subdivision falls within the additional orders that the Court may make when approving schemes of arrangement and that an additional order is appropriate in the present case. Counsel refer specifically to:
(w)the ability for companies to subdivide shares as recognised in s 48(c) of the Companies Act and in cl 21.5 of Fonterra’s constitution;
(x)the scheme of arrangement approved in Re Trust Power Limited which involved a share subdivision;20 and
18 Re Fonterra Co-operative Group Ltd, above n 1, at [47].
19 Companies Act 1993, ss 237(1)(b) and (f).
20 Re Trustpower Ltd [2016] NZHC 2499.
(y)the contemporaneous share subdivision is necessary to ensure that the Shareholders’ voting rights remain unaffected by the Scheme.
For the reasons outlined above, and particularly because the reason for the contemporaneous share subdivision is to ensure that the return of capital does not affect the voting rights of Shareholders, and in the absence of any opposition, I consider that the arrangement now voted on by Fonterra’s Shareholders including the share subdivision falls within the definition of “arrangement” in s 235.
Leave for further orders
In addition to orders approving this Scheme, Fonterra seeks an order allowing it to return to Court if needed on any matter relating to the Scheme or its implementation. Counsel confirms that they do not anticipate any need for such further orders or directions but do so out of caution. This appears appropriate in the circumstances and so I include this order below.
Result
I order:
(z)the Scheme of Arrangement described in the Arrangement Document attached as Schedule 1 to this judgment (Scheme) is approved;
(aa) the Scheme is binding with immediate effect upon:
(i)Fonterra;
(ii)every person who is a Shareholder (as defined in the Arrangement document) as at 9 pm (NZT) on the record date (Record Date) (as defined in the Arrangement Document); and
(iii)such other persons as necessary to give effect to the Scheme;
(bb)Fonterra is granted leave to apply to the Court for approval of any amendment, modification, or supplement to the Scheme if necessary.
Associate Judge Sussock
SCHEDULE 1 – ARRANGEMENT DOCUMENT
Scheme of Arrangement pursuant to Part 15 of the Companies Act 1993 BETWEEN: Fonterra Co-operative Group Limited and the holders of shares in Fonterra
Co-operative Group Limited at 9:00pm (New Zealand time) on the Record Date.
1.INTERPRETATION
1.1In this document, unless the context otherwise requires:
"Business Day" means a day on which the New Zealand Stock Exchange operated by NZX Limited is open for trading.
"Custodian" means the person acting as the custodian of the Fonterra Shareholders' Fund established by deed dated 23 October 2012, being Fonterra Farmer Custodian Limited.
"Fonterra" means Fonterra Co-operative Group Limited. "Implementation Date" means the Business Day after the Record Date.
"Record Date" means 10 August 2023, or the date five Business Days after the date on which the final order from the High Court of New Zealand is made pursuant to section 236(1) of the Companies Act 1993 sanctioning the arrangement, whichever is the latest.
"Share" means a co-operative share in Fonterra.
"Shareholder" means each person who is registered in the share register of Fonterra as the holder of a Share at 9:00pm (New Zealand time) on the Record Date.
2.ARRANGEMENT
1.1On the Implementation Date the following steps will occur contemporaneously:
(a)One (1) Share for every six (6) Shares registered in the name of each Shareholder at 9:00pm (New Zealand time) on the Record Date shall be acquired by Fonterra and cancelled (together with all the rights attaching to those Shares). For this purpose, fractions of a Share to be acquired by Fonterra shall be rounded up or down to the nearest whole Share (with 0.5 rounded up); and
(b)One (1) Share that each Shareholder is registered in the share register of Fonterra as the holder of (and which is not to be acquired by Fonterra pursuant to sub-paragraph (a) above) shall be subdivided into such number of Shares so that immediately after the acquisition by Fonterra pursuant to sub-paragraph (a) above and such subdivision, each Shareholder is registered in the share register of Fonterra as the holder of the same number of Shares as that Shareholder held immediately prior to the acquisition by Fonterra pursuant to sub-paragraph (a) above and the subdivision.
2.2Within five Business Days after the Record Date, Fonterra shall pay to each Shareholder (or in respect of the Custodian, as the Custodian may direct Fonterra)
$3.00 for each Share which has been acquired by Fonterra from that Shareholder in accordance with the step in paragraph 2.1(a).
9
1