New Zealand dairy processor Fonterra has sold one of its noncore assets to lower their overall borrowings after it offloaded its 9% shareholding in the Australian co-op Bega Cheese for AUS$74m (€48m).
The holding, which was bought in 2013, was sold in order to free up capital to invest in higher-value dairy product.
The sale will not change Fonterra’s commercial relationship with the cheese company. Bega Cheese cuts and wraps cheese, and uses the brand for Fonterra in Australia under a franchise agreement.
Professor Jacqueline Rowarth of the University of Waikato said the sale wasn’t surprising because Fonterra paid about $500m (€310m) in interest and the cheese company wasn’t making money for the co-op.
The decision to sell the stake followed a shareholder vote at Bega Cheese’s AGM to increase the cap to 15% for individual shareholding in the co-op.