The Netherlands: RFC – members council agreed with revised financing system

The Holland headquartered dairy cooperative Royal FrieslandCampina its members council has agreed with a revised financing system. At the heart is the linking of a significant part of members’ capital to their milk deliveries through delivery certificates and a cooperative solution for the future tradability of free member bonds. This is to reduce the imbalances in members’ capital commitment caused by an ageing membership. In addition, it will also improve the quality of the company’s equity as a result of the issuance of the delivery certificates. The revised member financing system will take effect as of 1 January 2022. From 1 January 2022, the cooperative will be issuing its member dairy farmers with delivery certificates worth 8 euros per 100 kilos of milk delivered. The quantity of milk delivered in the period from 1 October 2020 until 30 September 2021 will be used to determine the first issue of delivery certificates. Members who have less than 8 euros per 100 kilos of milk in fixed member bonds and/or member certificates will be able to make use of a deferred payment scheme of up to 12 years. This will be an interest-free, deferred payment obligation for the member of the cooperative. During the first eight years, repayment will take place on the basis of the supplementary cash payment received by the members as part of the retained earnings policy. Special arrangements will be made for members who are carrying out a business takeover as part of their business succession and who do not have sufficient funds to pay for the delivery certificates. Members and former members will continue to be able to finance the company through free member bonds.

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