RECENT sales of non-core abattoir and pre-export assets are set to generate about $13 million for listed live export company Wellard Limited.
The company announced yesterday it had concluded a binding agreement for the sale of its Beaufort River Meats business for $8 million, including working capital.
The Beaufort River Meats abattoir at Kojonup has been sold to International Meat Co. Pty Ltd, headed by Iranian businessman Mahmoud Parastesh.
Wellard said it has also entered into binding term sheets for the sale of its Wellard Feeds business and its ‘Le Bergerie’ pre-export quarantine business for about $5 million, including working capital, to a subsidiary of Ausvision Rural Services Pty Ltd, which is owned by Livestock Shipping Services.
The company said the proceeds of the asset sales, and their use to help fund the partial early redemption of convertible notes, would “deleverage Wellard’s business sheet and reduce associated interest payments.”
Wellard said it has reached agreement with its convertible noteholders – Black Crane Capital Ltd, Penta Asset Management Ltd and TradeInvest Asset Management Company (BVI) Ltd – for the early redemption of 3.5 million convertible notes, worth US$3.5 million. The company expects the sale of each business to be completed before 31 March 2019. It said the transations include provision for all staff to transition with the businesses.
Wellard executive chairman John Klepec said Wellard recognised the businesses have been an important part of the company’s history and identity.
“The sale represent a value opportunity, and are a demonstration of the board’s commitment to focus strongly on the shipping and trading divisions of the company in the future.”
Two weeks ago Wellard said its decision to divest the assets is consistent with its strategy to hone its focus on its core activities – livestock vessel chartering, feeder and slaughter cattle exports to Asia and the export of breeding and dairy cattle. The company retains some exposure to the live sheep trade through its large multi-purpose sheep and cattle livestock carriers — Ocean Drover and Ocean Shearer — which are suitable to the long-haul trade.
Click here to read the full Wellard statement to the Australian Stock Exchange yesterday.