Windfall for farmers as 82pc vote yes to Glanbia share sale
Published 29/11/2012 | 05:00
OVER 16,000 farmers will reap a cash windfall after they opted to relinquish 7pc of their stake in the country's leading dairy company for a whopping €157m.
The move could see Glanbia's 4,400 milk suppliers getting €15,000 on average in a share spin-out, while the payout for ordinary shareholders should be closer to €8,000.
Just shy of 82pc of shareholders backed a proposal for Glan-bia Co-op to relinquish its controlling interest in Glanbia Plc at a farmer meeting.
The meeting, which was held in Gowran Park Racecourse outside Kilkenny, attracted 4,649 farmers, with 81.8pc backing a proposal to sell 10pc of its equity in Glanbia Plc and take the co-op's stake from 51.4pc to 41.4pc.
The vote is part of a major restructuring of Glanbia's operations in Ireland that has proven to be extremely divisive and resulted in a serious split in the company's board.
The changes centre on a decision to establish a joint venture company between Glanbia Co-op and Glanbia Plc on a 60:40 basis that took control of the company's Irish milk processing business. That move received the overwhelming support of co-op shareholders a fortnight ago.
To finance that plan, the co-op reduced its stake in the plc from 54.4pc to 51.4pc. The latest sale of plc shares aimed to provide additional funding for the new joint venture company and was also touted as a means of rewarding farmer shareholders.
However, 75pc shareholder approval in two separate ballots was needed to allow the co-op reduce its stake in the plc below 50pc.
The second vote is due to be held on Wednesday, December 12, but such was the level of support yesterday that the proposal is now almost certain to be carried.
The result will come as a relief to Glanbia management. The restructuring proposals came in for serious criticism at a series of heated farmer meetings held across the east and south-east over the last six weeks. The establishment of the new joint venture company was also opposed by four of the company's farmer directors.
However, management insisted that the changes were needed to secure the necessary investment in Glanbia's Irish milk processing operations.
They pointed out that the joint venture company had already committed to developing a new €180m milk processing facility at Belview Harbour near Waterford.
This view was shared by the majority of farmers in Gowran Park. Former IFA leader Padraig Walshe was one of the dairy farmers who voted "yes".
Mr Walshe, a Glanbia supplier from Durrow, Co Laois, said the move would present an opportunity to "reduce debt in the co-op" and to fund its future expansion.
Glanbia has a milk pool of 1.58 billion litres but this is forecast to grow by at least 500 million litres once EU controls on milk production are lifted in 2015.
While Glanbia has well known brands such as Avonmore milk, the company now makes most of its profits from the nutritionals sector. This provides supplements and proteins to sports teams and athletes.
see Business, page 2