Cash-strapped livestock shipper, Wellard Limited, has sold another of its vessels, MV Ocean Swagman, for $22 million.
Heytesbury Holding bought the ship, which can carry 26,000 sheep, and will charter it back to WA-based Wellard for an initial period until March 31, 2021, with options to extend for up to four years.
Heytesbury, which is owned by the Holmes a Court family, holds an 11.42pc share of Wellard.
Wellard's noteholders will receive $US10m from the sale which is expected to occur on August 31.
The sale and leaseback represents another major step in Wellard's plan to reduce debt and improve financial and operating flexibility.
The deal also means Wellard will retain access to a fleet of four specialist livestock vessels.
When completed, the group's overall debt will be reduced from about $US85m to around $US64m, Wellard said in a statement.
The company said sale proceeds will be used to pay out the remaining $US6m Wellard owes to the vessel's financier, Nord LB, while $US10m will be paid to convertible noteholders and the balance to other vessel financiers and transaction costs.
The outstanding balance owed to the noteholders will be $US5.5m.
Wellard made a modest $2.9 million profit for the half-year to December 31.
In April the company collected more than $17m from the sale of its Wongan Hills feed mill and Beaufort River Meats abattoir and a pre-export quarantine site lease, all in WA, plus its Victorian pre-export quarantine facility near Portland.
Two years ago it sold its MV Ocean Outback for $35m to an Israeli company.
Vernon Graham
Former editor of The Land, former Fairfax Media Agricultural Editor
Former editor of The Land, former Fairfax Media Agricultural Editor
