Wellard float looking to raise $298.9m

27 Nov, 2015 01:00 AM
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Wellard chief executive officer Mauro Balzarini at Wellard's Baldivis feedlot facility.
Wellard chief executive officer Mauro Balzarini at Wellard's Baldivis feedlot facility.

AUSTRALIA'S largest live cattle exporter Wellard is hoping to be listed on the Australian Stock Exchange (ASX) before Christmas.

Wellard lodged a prospectus last week in relation to its initial public offering (IPO) with the Australian Securities and Investments Commission.

Retail and institutional investors have been offered 215 million Wellard shares, representing 54 per cent of the company's issued capital, and will raise $298.9m based on a price of $1.39 per share.

Wellard says the IPO will provide it with the financial flexibility for growth initiatives and to repay certain external debt.

Based on the offer price, Wellard will have a market capitalisation of $556m.

At the completion of the IPO, a holding company controlled by Wellard chief executive officer Mauro Balzarini will own about 36.6pc of Wellard and Wellard management will own 3.4pc.

Mr Balzarini said the family business-structure was not suitable going forward.

"We want to take advantage of the work we've done and not miss the boat, because the opportunities are very big and we want to capture them," he said.

"You have to look at the next phase.

"When you have vision and you believe in what you are doing, if you have to give away some of the pie to someone else to reach your goals then I personally believe that's the right thing to do."

Mr Balzarini said Wellard needed to capitalise on the opportunity presented by the rising global demand for red meat.

He said the IPO will provide funding for many uses, including the financial flexibility to execute its identified growth initiatives and longer-term strategy and fund the acquisition of the IPO subsidiaries.

"Global consumer demand for red meat is growing, particularly in South East Asia," he said.

"To meet that demand Wellard wants to expand its land and maritime logistics capacity, partner with customers in Asia in downstream facilities, secure sourcing of livestock via strong engagement with suppliers and continue to develop our global supply of livestock.

"Wellard has substantial growth plans and the IPO will provide it with the ability to invest in those growth projects.

"Wellard will be listed with a conservative capital structure.

"We are building two new facilities in Townsville and in Darwin and our big project in China, so all this requires money, this is why we have decided this was the right thing to do.

"The reason we are doing this is exactly highlighted in the prospectus, so everyone can see what we want to do with the money; so it's very clear.''

Mr Balzarini said there was some concern initially in listing a live export business.

"When we started to think about floating the business, some people thought I was crazy because the public doesn't like live export," he said.

"We had a lot of questions about animal welfare.

"We had to demonstrate the system we have in place in Vietnam and in Indonesia, they understand it and I think the reputation Wellard has in terms of animal welfare is second to none, which has helped.

"In any industry where there are animals, it is something you have to consider.

"It's not just ethical, an animal that is well-treated is an animal that has more meat and better quality meat.''

Mr Balzarini said the company had capitalised on the Export Supply Chain Assurance System which has become the Australian brand for animal welfare.

He said Wellard is becoming more mainstream in the beef industry, and didn't envisage any other Australian company following their trend.

"To be frank, I don't see other players in the industry with the same vision," he said.

"I think we might open a gate for others."

The company hopes to commence trading on the ASX on a normal settlement basis on December 17.

Wellard will also appoint a five person board that will consist of Mr Balzarini, chairman David Griffiths, Wellard finance director and company sector Greg Wheeler and non-executive directors Sharon Warburton and Philip Clausius.

The prospectus is available in electronic form at www.wellard.com.au.

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