PUBLICLY-listed livestock vessel charterer Wellard Limited has confirmed it is selling its MV Ocean Ute vessel for US$12 million.

The MV Ocean Ute is  one of the company’s last two remaining vessels.

In an announcement to the Australian Stock Exchange, Wellard confirmed it will sell the MV Ocean Ute for US$12 million — about AUD$18 million — to the Marshall Islands registered company, Bassem Dabbah Shipping Inc.

The Wellard board said intends to return the majority of the net sales proceeds to shareholders and it is currently considering the available options of doing so.

Should the board decide on a capital return to shareholders, it would require shareholder approval at Wellard’s 2024 annual general meeting and the receipt of tax advice, the company said.

The price of Wellard shares more than doubled following the sale announcement on 1 July from 1.75c to 3.5c per share, and the stock ios now at 4.3c.

Wellard executive chairman John Klepec said the company was pleased to have achieved a sale price above the current net book value of the vessel.

“The MV Ocean Ute has been a good vessel for Wellard, and helped us meet a price point in the market,” he said.

“But it is about to reach a tipping point with respect to market value, maintenance costs, future cash generation and profitability, so the sale is a good outcome for Wellard and its shareholders.

“The vessel achieved mixed utilisation in the second half of FY2024 when it was idle until late February and then fully booked for the remainder of the period,” Mr Klepec said.

“The board therefore took the decision to crystalise its value now.

“We have booking notes in hand up until the vessel’s planned last voyage for Wellard in September 2024, when the transaction is expected to complete.”

Dispute over Drover ownership

Wellard Limited remains locked in negotiations aiming to resolve a dispute over the ownership of its last remaining vessel, the Ocean Drover.

Wellard said in its statement to the ASX that it is continuing to engage productively with KPMG (Singapore) as the liquidators of Ruchira Ships Limited, the registered owner of the MV Ocean Drover, to seek a commercial resolution that will result in the return to Wellard of full, unencumbered legal title to the Drover.

It follows an announcement earlier this year revealing that United Overseas Bank had formally appointed KPMG Services Pte Ltd as liquidators to Ruchira Ships Limited.

Singapore-based Ruchira is the financier of the MV Ocean Drover, and is currently its registered owner.

“Wellard will continue to vigorously assert its legal rights to receive the unencumbered redelivery of title to the Ocean Drover, and will now deal with the liquidators and any other relevant party to resolve the matter,” Wellard said in a filing to the ASX on January 12.

Despite the dispute over ownership Wellard continues to operate the Drover under a nine-year bareboat charter which enables it to operate the vessel for charter customers.

Mr Klepec said demand for the MV Ocean Drover had been strong with the ship fully utilised for the calendar year to date, shuttling between South America and Turkey.

“Importantly, we now have charters for the MV Ocean Drover committed right through until the end of the year, ensuring its utilisation rates will remain high,” he said.

He said Wellard expected to be able to update shareholders about the progress of the negotiations with Ruchira when the company releases its full year financials in late August.