Australia's largest dairy company, Murray Goulburn, will list its special trust on the Australian share market on Friday at $2.10 per unit, the lower end of the indicative price range.
In May, Murray Goulburn indicated a range of $2.10 to $3.20 per unit in the MG Unit Trust, but the company says the price had been hit by falling financial markets across the world.
The MG Unit Trust is a special purpose funding vehicle that will allow external, non-farmer investors to invest in Murray Goulburn.
Unitholders will only have an economic interest in Murray Goulburn and will not have any voting rights.
Voting rights and operational control remains with the co-operative's dairy farmer shareholders.
At $2.10 the implied market capitalisation of Murray Goulburn Co-operative is $1.2 billion.
Murray Goulburn chairman Philip Tracy said in a letter to suppliers and shareholders on June 30 that the initial public offer of units in the trust had been fully subscribed but at the low end of the indicative price range.
"As suppliers will be aware, global events of the past week and continuing today, have weighed heavily on financial markets across the world, and our capital raising has not been immune to this," Mr Tracy said in the letter.
Nonetheless, Mr Tracy said the strong demand for units in the MG Unit Trust reflected the quality of Murray Goulburn's business and was an endorsement of the co-operative's strategy to maximise farmgate milk prices and future earnings.
Murray Goulburn has been seeking to raise $500 million in new capital from suppliers through an issue of more shares to supplier shareholders, and from non-farmer investors in the MG Unit Trust.
Mr Tracy said Murray Goulburn plans to grow its business in Australia and overseas to achieve higher milk prices and returns for investors.
The co-operative is seeking to produce more higher-value-added premium dairy foods, moving away from volatile bulk commodity markets and prices.
Mr Tracy said Murray Goulburn had paid a farmgate price of $6.00 per kilogram of milk solids for the past two seasons and was forecasting a price of $6.05 for the 2015/16 season.
Murray Goulburn has more than 2,500 farmer shareholders and received about 3.4 billion litres, or 37 per cent, of Australia's milk in 2013/14.
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