Australian livestock ship owner and operator Wellard Limited has signed a binding Memorandum of Agreement (MoA) to sell one of its livestock vessels, the M/V Ocean Outback.
The company is selling the ship for a total of AUD 34.9 million (USD 26 million) to the Israeli company, Dabbah Slaughterhouse Limited.
Wellard said that the sale of the mid-sized M/V Ocean Outback, which was built in 2010, is part of the company’s ongoing review of its fleet to match the shipping capacity to current market conditions and future fleet additions.
The transaction will result in an estimated USD 12.17 million reduction in existing debt, USD 13.57 million increase in cash on hand and USD 9.7 million non-cash accounting loss resulting from the impairment in the book value of the asset and related inventory.
Wellard expects to finalize the sale in first quarter of fiscal year 2018.
“Wellard continues to work through very difficult trading conditions, which have remained soft in the second half of the financial year,” Mauro Balzarini, Wellard CEO, said.
“The company is reviewing the carrying value of its assets, and subject to valuation, this may result in impairments when it finalises its accounts at year-end, which, together with expected higher trading losses, will lead to a second half loss higher than the first half,” Balzarini added.