THE sale of the live export vessel, MV Ocean Shearer, has been completed between Kuwait Livestock Transport and Trading (KLTT) and Wellard with the later seeing US$53 million (about $89.8m), for the vessel after taking into account recent value changes to the Australian dollar.
Wellard said the completion of the sale also finalised the company's recapitalisation program and strengthens its working capital position.
The recent devaluation of the Australian dollar has increased the $A amount received from the sale by $12m from $77.8m at the time the term sheet was signed to about $89.8m at today's exchange rate.
While this does not impact the company's debt repayments, which are also in US dollars, it does significantly increase the Australian dollar value of the cash retained from the sale.
Wellard paid about $69.1m of the sale proceeds to reduce its financial debt to just $28.7m, "a level more appropriate to current activities and market conditions".
The remaining $20.7m will be retained as cash for operations.
Wellard executive chairman John Klepec said the company would focus exclusively on maximising earnings and profits from the MV Ocean Drover and MV Ocean Ute and the long-term chartered MV Ocean Swagman.
"The sale of the MV Ocean Shearer reduces Wellard's debt to very manageable levels, crystallises value from an under-utilised vessel in our fleet, and significantly de-risks the business providing working capital for the company in the present circumstances," Mr Klepec said.
"We are noticing that countries with food security concerns or fresh meat requirements are becoming increasingly reliant and/or focussed on livestock imports as global airlines shut down operations, delaying imports of chilled meat.
"While COVID-19 travel restrictions are creating some logistics issues with respect to stockmen/women, crew and veterinarians, we have been able to manage these to date.
"At present, all of our fleet are in demand by Australian exporters."
From the funds received, Wellard will pay out the remaining associated vessel finance to Intesa Sanpaolo Bank and pay out in full the debt owed to noteholders.
In discharging the Intesa loan, the remaining "key-man" restrictions relating to the Balzarini family will also cease to exist.
Accordingly, parties owned or controlled by former Wellard chief executive officer Mauro Balzarini will no longer be required to hold a minimum 12.5pc shareholding in Wellard Limited.
Wellard has been advised that when this restriction is lifted, creditors associated with Mr Balzarini's private interests will take possession of the majority of those previously restricted shares.
Wellard has no influence over the timing and execution of that transfer, and an appropriate announcement will be made in due course.
