May 6 (Reuters) - Fonterra Co-Operative Group Ltd FCG.NZ :
* FONTERRA STARTS CONSULTATION ON CAPITAL STRUCTURE OPTIONS
* STARTING CONSULTATION TO SEEK FARMER FEEDBACK ON POTENTIAL OPTIONS TO CHANGE CAPITAL STRUCTURE
* CAPITAL STRUCTURE REVIEW SEEKS TO ENSURE SUSTAINABILITY OF CO-OPERATIVE INTO FUTURE
* CO-OPERATIVE IS TEMPORARILY CAPPING SIZE OF FONTERRA SHAREHOLDERS' FUND
* SOME OF OPTIONS CO-OPERATIVE IS ASKING ITS FARMERS TO CONSIDER INCLUDE BUYING BACK FUND
* CAPPING FUND BY SUSPENDING SHARES IN FONTERRA SHAREHOLDERS' MARKET FROM BEING EXCHANGED INTO UNITS IN FUND
* OPTIONS INCLUDE DUAL SHARE STRUCTURES
* NEEDS TO BE PREPARED FOR FLAT OR POTENTIALLY DECLINING MILK SUPPLY DUE TO CLIMATE CHANGE, REGULATORY CHANGES, ALTERNATIVE LAND USES
* BOARD PUT FORWARD A PREFERRED OPTION OF REDUCED SHARE STANDARD WITH EITHER NO FUND OR A CAPPED FUND
* IF BOARD DECIDES TO SEEK CHANGE TO CO-OPERATIVE'S CAPITAL STRUCTURE, WOULD LIKELY AIM FOR FARMER VOTE AROUND ANNUAL MEETING IN NOV
* IF BOARD DECIDES TO SEEK CHANGE TO CO-OPERATIVE'S CAPITAL STRUCTURE, WOULD LIKELY AIM FOR APPROVAL OF 75% OF VOTES FROM VOTING FARMERS
* UNDER PREFERRED OPTION, MINIMUM REQUIREMENT FOR FARMER OWNERS WOULD BE ONE SHARE FOR EVERY FOUR KGMS SUPPLIED TO CO-OP
* SOME ALTERNATIVE STRUCTURES CONSIDERED INCLUDE UNSHARED SUPPLY STRUCTURES, TRADITIONAL NOMINAL SHARE STRUCTURE, & SPLIT CO-OPERATIVE MODEL
* IF PREFERRED OUTCOME IS TO BUY BACK FUND, IT WOULD ALSO REQUIRE APPROVAL OF 75% OF VOTES FROM VOTING UNIT HOLDERS
* KEY OUTCOME OF THIS CHANGE IS THAT SHARES WOULD BE BOUGHT AND SOLD BETWEEN FARMERS IN A FARMER-ONLY MARKET
* BELIEVE THE BEST OPTION FOR CO-OP IS TO MOVE TO A STRUCTURE THAT REDUCES THE NUMBER OF SHARES A FARMER WOULD BE REQUIRED TO HAVE