It has sold the MV Ocean Swagman to Heytesbury Holding Company for US$22m although will charter the vessel back for an initial period between now and 31 March 2021, with options to extend for up to seven years, with varying rates and terms agreed.
The funds from the sale of the MS Ocean Swagman will be used to settle the business’ debt. This transaction is expected to reduce Wellard’s debt from US$85m to US$64m as well as improving its cashflow. Wellard said it will “continue to address the need for further balance sheet restructure, and is actively considering all options to achieve that objective”.
Launched in 2009, the MV Ocean Swagman is the sister ship of the MV Ocean Outback, which was sold for US$26M in 2017. It has the capacity to transport 7,000 cattle or 26,000 sheep, or a combination of both.
The ship was classified by the Registro Italiano Navale as a ‘Green Star Vessel’, due to its low emissions and pollution prevention design and systems. When it was launched seen as a step change in livestock vessel design and construction due to its focus on enhanced welfare and safety of livestock, vessel and crew.
John Klepec, Wellard’s executive chairman, said: “Heytesbury’s purchase of the M/V Ocean Swagman provides an attractive opportunity for Wellard to realise the equity value in the ship while retaining continued use of the vessel for chartering or exporting opportunities. Heytesbury has a deep understanding of the business, and we look forward to continuing our very productive working relationship.
“Wellard will now be able to reduce and retire debts. We will also pay out Nord LB. There is still more work to do on the balance sheet to get it to a level where it needs to be, and this remains a priority for the Company. The sale of the M/V Ocean Swagman and the ongoing cooperation of our Convertible Noteholders under the renewed standstill agreement will make additional restructure initiatives more attractive to investors.”