Wellard selling meatworks, mill and quarantine sites for $17m

Wellard selling meatworks, mill and quarantine sites for $17m


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Wellard has sold its Wongan Hills feed mill and expects to complete its Beaufort River Meats sale in April

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Listed livestock exporter, Wellard, is expecting to reap more than $17 million when it wraps up the sale of its Wongan Hills feed mill and its Beaufort River Meats abattoir in Western Australia this month.

The sell-off process also includes its Baldivis pre-export quarantine site lease in WA and its Victorian pre-export quarantine facility at Condah, between Portland and Hamilton.

The WA quarantine site and Beaufort River Meats are being sold to Ausvision Rural Services, a subsidiary of Wellard's live export rival, the Jordanian-owned, Livestock Shipping Services, also based in Perth.

LSS has been shipping livestock from Australia around the world for over 15 years and boasts access to one of the world's largest livestock transport fleets.

The Baldivis and Condah quarantine sales have just been completed.

The abattoir sale, worth about $8m, is expected to be completed by the end of April, having been earlier earmarked to sell to the International Meat Co in a deal which fell through in February.

Wellard retained the deposit from the original contract after it failed to eventuate.

Wellard expected to realise about $17.5 million in free cash flow, including the retained deposit, realisation of working capital, and the sale of other related assets in relation to the properties.

In December Wellard advised shareholders it had agreed to an early redemption of 3.5m convertible notes, worth almost $5m, as part of a standstill agreement with its noteholders, and after reaching agreements for the sale of non-core assets.

Weathered by market setbacks in the live export trade and funding stresses in recent years, Wellard has since extended the previous noteholder standstill period to expire on September 30, and potentially beyond that date at the discretion of the noteholders.

During this second standstill period Wellard has committed to redeem a minimum of $700,000 in convertible notes a month and pay a coupon rate of 14 per cent a year on the face value of the outstanding notes.

The interest rate will increase if the standstill period is further extended.

The parties have agreed the notes are no longer convertible into Wellard shares.

Wellard's share price, which began trading at almost $1.40 in late 2015, was this week up slightly on recent trade at almost six cents a share.

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