Fonterra calls for an immediate trading halt

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Fonterra has requested an immediate trading halt to the Australasian stock markets as it considers the outcome of its arbitration with Danone seeking $980 million from the dairy giant as a result of a botulism scare.

Danone has made two claims, one to be decided by a New Zealand tribunal, the other a Singaporean. A Fonterra spokeswoman could not reveal whether only one or both were to be announced on Friday.

The dairy giant recalled whey protein concentrate as a precaution in 2013.

Fonterra chief executive Theo Spierings said the co-operative expected to make a market announcement in relation 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.

Danone reported revenue for 2014 of $252m, down from $318m in 2013, with expenses of $13m, twice the previous year.

The French company and Fonterra fell out over the botulism scare, with Danone taking two cases to court against Fonterra. One, seeking damages of $980m, is to be decided by arbitration in Singapore.

The other is for $545m, the amount Danone says that the botulism incident cost it when it had to recall 67,000 cans of its Karicare brand.

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