An Australian dairy co-operative has listed a unit trust on the Australian Securities Exchange in order to raise capital. Set up in 1950, Murray Goulburn has grown into the largest processor of milk in Australia and the country’s largest exporter of processed food.
Over 90 of the co-operative’s members voted in favour of the new capital structure on Friday 8 May following 18 months of consultation and discussion, including five rounds of members meetings.
It aims to raise AUD $500m via the public offering to fund capital investments. The business will keep its co-operative structure but the unit trust model will allow external investors to buy non-voting shares. Melina Morrison, chief executive of the Business Council of Co-operatives and Mutuals of Australia, said: “Rather than a sign that the co-operative model inhibits growth and business development, Murray Goulburn’s innovative capital raising shows the strength and flexibility of the model in an increasingly competitive and globalised agriculture market.
The trust could be listed by July with the proceeds being used to invest in new plans and upgrades for existing facilities. With this capital, the co-operative aims to shift its sales mix away from commodities like milk powder towards value-added products such as infant formula. The 2,500 members will retain control of the co-operative but external investors will be able to receive a dividend stream linked to the milk price. With this move, the co-operative also aims to increase the milk price paid to its farmers.