Dairy Farmers of Britain debt plan rejected

Loanstock holders of troubled dairy co-op Dairy Farmers of Britain have voted against plans to convert about £70m worth of loanstock and member money into equity shares.

Six separate loanstock meetings were held yesterday (26 March). Two voted against the motion, one was adjourned and three had insufficient attendance, a DFB representative told Farmers Weekly.

But today’s (27 March) council meeting voted in favour of DFB’s plans to convert loanstock to equity shares.

It was hoped that if loanstock holders had backed the proposal, the restructuring would radically strengthen the co-op’s balance sheet and help improve business stability.

“The board has said all along that the move is in the best interests of the business, so we will go back to the beginning of the process and try again to get loanstock holders’ backing,” the representative said.

“It won’t happen immediately as we have to go back and issue the appropriate notice, but we will start that process.”

Last November the co-op unveiled a massive restructuring prorgamme, which meant the closure of its dairies at Portsmouth and Fole in Staffordshire, as well as the loss of jobs at its Nantwich head office and factory at Blaydon, Tyne & Wear.

At the same time DFB made a retrospective reduction in its milk price to fund restructuring, cutting 2p/litre from its 600 members’ milk cheques from the beginning of November. Since then DFB announced a further 1.1p/litre milk price cut for its farmers across all its payment schedules in February.

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