Is Wellard’s Decision to Sell M/V Ocean Ute a Good Deal for it and Shareholders alike?
Team Veye | 01-Jul-2024
Wellard (ASX: WLD) by signing a binding contract to sell its oldest livestock vessel, the M/V Ocean Ute, for approx. A$18.1 million in cash appears to have achieved a sale price above the current net book value of the vessel.
Although it has been a good vessel for the company, it is about to reach a turning point considering market value, maintenance costs, future cash generation and profitability.
The vessel had mixed utilization in the second half of FY2024 since it was idle until late February and then fully booked for the remainder of the period.
Willard board welcomed the deal as the sale price exceeded the current net book value. And with its intention to return the majority of the net sales proceeds to shareholders could spell a bonanza to its shareholders.
Upon transaction completion and before any return of capital to shareholders, the sale of the M/V Ocean Ute will result in an estimated US$11.8 million (approx. A$17.8 million) increase in cash on hand, after fees and commissions.
Source: Company's Report
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