Fonterra Cooperative Group owes holders in its Fonterra Shareholders Fund units a “more fulsome” update on Beingmate, the struggling Chinese infant formula producer and distributor that Fonterra uses to push its leading Anmum formula into the Chinese market, according to an analyst.

In a note to investors dated Sept. 7, First New Zealand Capital’s head of institutional research, Arie Dekker, identifies the lack of transparency about Fonterra’s 18.8 percent shareholding in Beingmate as a confidence as well as a performance issue for investors.

“We view the investment as a material one from both a financial and confidence perspective. We think the time is right for FSF to provide a more fulsome disclosure on what has happened with Beingmate and the reasons why it remains confident in the long term future.”

A Fonterra spokesman confirmed that there would be an update on Beingmate in the cooperative’s Sept. 25 earnings announcements.

FNZC values the Fonterra stake in Beingmate at approximately $420 million, down around 45 percent on its March 15 purchase price of around $756 million, reflecting a range of problems at Beingmate, which included the firm declaring a $78 million loss for the most recent half-year, having previously given guidance for a $10 million profit for the period.

Beingmate shares, which are listed on the Shenzhen stock exchange, fell 10 percent earlier this month after the result and immediately following their release from a trading halt triggered by the company negotiating to sell two assets to its controlling shareholder for around $40 million.

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