LIVE exporter Wellard Limited is selling one of its livestock vessels – the MV Ocean Outback – for $34.9 million to an Israeli company, Dabbah Slaughterhouse Limited.
Wellard said the sale of the mid-sized vessel, which was built in 2010 for more than $40m, is part of a fleet review to match market conditions and manage future fleet additions.
The company anticipates the sale will be completed by September and the proceeds will be used for working capital.
Wellard chief executive Mauro Balzarini said it had received several approaches from parties looking to purchase its boats.
“We used the opportunity to progress the sale of the MV Ocean Outback to right-size our fleet,” Mr Balzarini said.
“The cash realisation and efficiencies Wellard gains in our view, outweigh the capital loss on this transaction.
“Wellard continues to work through difficult trading conditions, which have remained soft in the second half of the financial year.
“As previously announced there will be trading losses reported in the company’s year-end accounts.
“The company is reviewing the carrying value of its assets, and subject to valuation, this may result in impairments when it finalises its accounts at year end, which, together with expected higher trading losses, will lead to a second half loss higher than the first half.”
Mr Balzarini said the quantum of such losses was yet to be determined, with the financial year not complete.
He said despite a tough year, Wellard was managing its way through.
Mr Balzarini said the completion of $53m in capital raising, its Costs Out program and the sale of MV Ocean Outback, improved its liquidity position.
He said the market signals for the new financial year were more promising.
MV Ocean Outback made news for the wrong reasons late in 2015 when one of its engines failed when attempting to leave Fremantle for Israel.
It was loaded with 7400 sheep and 5600 cattle.
The 130 metre vessel was described on the Wellard website as the next generation in livestock vessel design and construction and can transport 6000 cattle or 25,000 sheep, or a combination of both.
It is a sister ship to the M/V Ocean Swagman.
