Fonterra in trading halt pending Danone legal outcome
Fonterra has requested a trading halt on its listed securities, including units in its Shareholders’ Fund, while it considers the outcome of its multi-million dollar legal stoush with French food giant Danone.
Fonterra has been locked in arbitration with Danone over a 2013 whey protein concentrate contamination scare, which turned out to be a false alarm.
Danone took two legal actions against Fonterra, one seeking damages of $980 million to be decided by arbitration in Singapore.
In a statement to the NZX Fonterra says it expects to receive a decision from the Arbitration Tribunal today that is likely to be both long and complex. Neither party has been given advance notice of the decision.
Fonterra chief executive Theo Spierings says the co-operative expected to make a market announcement about to the Danone arbitration decision as soon as possible after the decision is received.
“Fonterra remains in a strong financial position and any damages award will not affect our ability to operate. We will share further details with the market, our farmers and staff as soon as practical,” he said.
In 2013 Danone Nutricia cancelled its supply contract with Fonterra in the wake of the botulism scandal and blamed Fonterra for a 97% drop in profit after sales were disrupted when it had to recall infant formula from several countries.
Fonterra Shareholders' Fund units last traded at $6.36.