First Milk announce plans for new capital structure

First Milk has announced plans for a new capital structure that will reward members through a combination of interest and dividend payments plus a new share scheme, where members can ‘trade’ their shares.

In addition to continuing the existing commitment to pay interest on a member’s capital account, the structure introduces new preference shares, on which members will be entitled to a dividend based on the performance of the business.

“The new structure aims to reward members’ loyalty and their milk volumes,” First Milk chairman, Richard Greenhalgh, said. “We believe that it will also enable members to have greater clarity around how the business is performing.

“We have carried out extensive research into potential capital structures, looking at farmer co-operatives in Britain, Europe and further afield, in order to create a model that is fair and transparent.”

Members will vote on the proposal at the company AGM on 4 November. If approved, the new capital structure would ‘go live’ on 1 April 2009.