Wellard Limited Announces Sale of M/V Ocean Drover and Shareholder Benefits
WLD (WLD) Share Update January 2025 Monday 13th
Wellard to Sell M/V Ocean Drover for $50 Million
In a significant move, Wellard Limited (ASX: WLD) has announced the sale of its flagship livestock vessel, the M/V Ocean Drover, for US$50 million. This decision marks a pivotal moment in the company's history, as it plans to distribute the proceeds to its shareholders.
Instant Summary:
- Sale price of M/V Ocean Drover set at US$50 million.
- Shareholder approval required for the sale to proceed.
- Proceeds to be returned to shareholders, approximately A$0.15 per share.
- Potential delisting from ASX considered post-sale.
- Sale marks the end of Wellard's 46-year involvement in live export.
Sale Details
Wellard Limited has entered into a binding agreement to sell its livestock vessel, the M/V Ocean Drover, for US$50 million to Meteors Shipping SA, a company linked to a major Turkish agri-business. The sale is expected to be finalized in July 2025, pending shareholder approval and the fulfillment of contract terms.
The vessel, which has been a cornerstone of Wellard's operations, is currently chartered until June 2025. Upon completion of the sale, Wellard will see a significant cash influx of approximately A$81.2 million, which it plans to return to shareholders.
Shareholder Impact
The company has committed to distributing the net sale proceeds to shareholders, estimated at around A$0.15 per share. This move is contingent upon shareholder approval, which is a necessary step as the sale constitutes the disposal of Wellard's main business asset.
Wellard's Executive Chairman, John Klepec, expressed satisfaction with the sale price, noting it exceeds the vessel's current net book value. He emphasized the historical significance of the M/V Ocean Drover and its role in the company's success.
Future Prospects
With the sale of its primary revenue-generating asset, Wellard is considering its future structure, including the possibility of delisting from the ASX. The company will evaluate its options, taking into account the costs of maintaining its public listing status and potential future income sources, such as compensation from the Brett Cattle Company Class Action.
ASX compliance matters also play a role in Wellard's next steps. The company must demonstrate sufficient operational activity to maintain its listing, or face suspension of its securities if unable to comply by July 2025.
The sale of the M/V Ocean Drover is a strategic decision that will significantly alter Wellard's business model. The return of proceeds to shareholders is likely to be well-received, but the potential for delisting and the loss of its main revenue stream could raise concerns about the company's future profitability and stability.
Investor Reaction:
Analysts may view the sale positively due to the attractive sale price and shareholder returns. However, the uncertainty surrounding Wellard's future operations and potential delisting could lead to cautious sentiment among investors.
Conclusion:
Investors should closely monitor Wellard's shareholder meeting and subsequent announcements regarding the company's structure and listing status. The strategic decisions made by Wellard's board will be crucial in shaping the company's future and maintaining investor confidence.