The Irish Farmers Journal understands the board of Ornua, owners of the Kerrygold brand, is considering a restructuring proposal which would see shares in Ornua to the value of €100m given to eligible milk suppliers.

The proposal, which was presented to the board of Ornua by Dairygold last Friday, will see Ornua restructure from a co-op to an unlisted plc. Ornua is currently owned by its processing member co-ops.

It is understood that if passed the new proposal will see existing member co-ops own 80% of the new entity and eligible dairy farmers the remaining 20%. Based on the existing value of circa €500m, those farmers would be allocated shares to the value of €100m.

Based on the estimated figure of 13,500 dairy farmers who supply Ornua, each farmer is in line to receive on average shares valued at €7,500.

The new entity will be an unlisted plc, meaning shares will not be publicly listed on a stock exchange but an internal market will be operated to allow farmers to trade shares.

Based on the estimated figure of 13,500 dairy farmers who supply Ornua, each farmer is in line to receive on average shares valued at €7,500. The member co-ops, of which there are around 35, would receive around €400m in shares.

Governance issues

It is understood that Dairygold has been working solely on this proposal for the past number of months in order to find a solution to the ongoing governance issues at Ornua. Dairygold is understood had engaged investment and stockbroking firm Goodbody and corporate law firms McCann Fitzgerald and Deloitte to work on the proposal.

Ornua has been conducting a governance review since late last year. It is also understood that a new board structure is to be put in place which would include more independent board members.

An advisory board has also been proposed.

New chair

Last month Denis Cregan took over from Aaron Forde as chair of Ornua.

A spokesperson for Ornua said: “There is an on-going governance review process in progress. All board directors are fully engaged in the process and have the interests of all key stakeholders at front of mind. The process will take some time to complete.”

Dairygold declined to comment on the proposal.

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