First Milk announces capital structure plans

First Milk announces capital structure plans

Capital struture: Final element of turnaround plan

During the last nine months First Milk has implemented a turnaround plan to stabilize the business for the benefit of members. At the same time, the Board has been putting in place steps to ensure a sustainable long term future, and the latest phase of this work is to reshape the capital structure of the co-operative.

Chairman Clive Sharpe said:

"First Milk has made significant progress over the last nine months. We have reduced employee numbers, cut overhead costs, addressed quality issues and established a new governance structure. We have also refinanced the business with our existing lenders and disposed of our Glenfield business and our shareholding in Westbury Dairies.

"A final element of our turnaround plan is addressing our capital structure. Hence today we have communicated to members and ex-members our intention to convert farmers' loan capital into equity. In due course we will be confirming the type of equity to be issued; tax considerations for members, former members and how returns on equity might be paid in the future.

"This means that in the new financial year that starts in April, we can focus on improvements that we need to make to our relative milk price and rebuilding the long term value of First Milk as a member owned business."