TROUBLED livestock vessel operator Wellard has reported to the ASX it is to sell its last remaining vessel Ocean Drover for $81.2 million.
In the announcement on 14 January the company said it would return proceeds to shareholders. Wellard Limited has signed a binding contract to sell the livestock vessel to Meteors Shipping SA.
The ASX announcement said the sale of the vessel represents the sale of the main undertaking of the Wellard business, and therefore requires shareholder approval to become final and binding.
Meteors Shipping SA, is a Marshall Islands company controlled by Göktaşlar Et-Et Ürünleri Yan Sanayi ve Ticaret Limited Şirketi, a significant Turkish agri business with which Wellard has conducted successful business for some time.
The statement said Wellard has confirmed charters for the vessel until June 2025, and subject to fulfilment of all conditions, expects completion of the sale to occur in July 2025.
“Upon transaction completion, and before any return of capital to shareholders, the sale of the M/V Ocean Drover will result in a US$50.0 million (approx. A$81.2 million) increase in cash on hand, after costs related to the sale.”
“If the sale is approved by shareholders, the Wellard Board intends to return all of the net sales proceeds of the M/V Ocean Drover to shareholders (approx. A$ 15 cents per share) plus an additional capital return of any surplus cash on hand as at the date of completion.
“There will be costs associated with shutting Wellard’s ship operations division and infrastructure and the need to fund some continuing costs. Timing and details of the shareholder meeting and the capital return will be announced shortly.”
Wellard Executive Chairman, John Klepec said: “We are very pleased to have achieved a sale price substantially above the current net book value of the vessel and we believe that this sale represents the highest possible value that can be realised for shareholders from the M/V Ocean Drover in the current market.
“The M/V Ocean Drover has been the flagship of the Wellard fleet in terms of profitability and capacity, and I have no doubt it will be a fantastic asset for its new owners.
“Subject to shareholder approval the sale of the M/V Ocean Drover will bring to an end Wellard’s 46-year involvement in the global live export industry. Throughout its history, Wellard has set a quality benchmark for global livestock trading and logistics, has been a major force in driving and maintaining the highest standards that the public expects of a modern agri-business, and has helped feed the world, linking livestock producers with consumers. I thank our many local and international customers and other stakeholders, particularly current and former staff and service providers, who have been supportive of Wellard’s business throughout its journey.”
The ASX statement said pending receipt of necessary approvals and sale completion, the only remaining existing potential income for Wellard is the possible future compensation from the Brett Cattle Company Class Action, in which Wellard is a class member.
“Although the Federal Court of Australia ruled in favour of the class in June 2020, the timing and final quantity of payment to individual class members other than the Brett Cattle Company remains uncertain as the Federal Labor Government has rejected the total quantum of the claim.
“For that reason, Wellard has not recognised the claim as an asset on its balance sheet. Given the sale of the Drover, which represents Wellard’s sole remaining revenue-generating asset, and the costs of remaining a publicly listed entity, Wellard’s Board will consider the best structure for the business, including the possibility of delisting from the ASX, and continuing as a public unlisted company,” the statement said.
