World\'s biggest dairy firm considers capital raising to fund expansion

Fonterra, New Zealand\'s biggest corporation and the world\'s biggest dairy company, announced on Thursday that it would be looking at new methods of raising capital to help the farmer cooperative\'s expansion. The announcement came as Fonterra chairman Sir Henry van der Heyden announced at the annual meeting that he intended to stand down at the 2012 annual meeting, when he would have held the post for a decade. Chief executive Theo Spierings told the cooperative\'s annual meeting that Fonterra needed permanent share capital so it could reach its \"full potential,\" said a statement from Fonterra. He said Fonterra needed \"trading among farmers\" that would allow private investors to claim a dividend but not ownership of shares. Spierings said that New Zealand farmers would retain control of the business, possibly through a 100-percent Fonterra-owned subsidiary that would act as a \"custodian\" holding legal title of farmers\' shareholdings. Spierings said he had asked management to see if there was a workable solution that would enable legal title for shareholders if they placed their shares in a shareholders fund. \"We are going to push the boundaries to see if we can get to a workable solution that addresses shareholders\' concerns. It might be more cumbersome and expensive than having the Fonterra custodian, but we owe it to our shareholders to let them know before Christmas if there is another option.\" Meanwhile, van der Heyden said his replacement would be decided when Spierings, who replaced Andrew Ferrier as chief executive in September, was entering his second year in the post, ensuring a smooth transition, said a statement from Fonterra. Van der Heyden has been on the board of Fonterra since its formation 10 years ago and chairman since 2002. Fonterra is the largest processor of milk in the world, producing more than 2 million tons of dairy products every year and employing 16,000 staff.