Fonterra said it had reaffirmed its "co-operative spirit" as the dairy giant won overwhelming support for a capital restructuring plan proposed following member opposition to a full-scale stock market listing.

The group, which accounts for about one-quarter of New Zealand's exports, cleared the way for raising potentially NZ$1bn (US$740m) from its 10,500 members by gaining backing for farmers to own more shares than their milk output would currently entitle them too.

Members will be able to build a shareholding equivalent to 120% of dairy production, after giving the reform 89.6% support at a vote at the group's annual meeting.

They also voted, by 89.7%, for the value of the Fonterra shares to be adjusted to reflect the fact that they cannot be freely traded.

This amounts to introducing a discount to the shares, given that illiquid stock tends to command lower valuations.

'Stepped up to the plate' 

The magnitude of members' support showed "great confidence in the co-operative and our future", Sir Henry van der Heyden, the Fonterra chairman, said.

He added that the reform process, which has been a year in the mix, had "done a lot to build co-operative spirit".

Managers and farmers had "all worked hard and pulled together to make this happen", after members opposed giving Fonterra a stockmarket listing which, two years ago, could have valued the group at NZ$10bn, according to Deutsche Bank

"[Members] told us they wanted to retain 100% ownership of our co-operative," Sir Henry said.

"They said give us the opportunity to back our co-operative. Today they have stepped up to the plate in a big way to strengthen our co-op."

Farmer representative Blue Read said that that the reforms gave members an opportunity to support the co-operative through investment.