Wellard Seals Financing for Latest Fleet Addition

Australian livestock ship owner and operator Wellard Ltd has finalized the financing of its livestock carrier M/V Ocean Shearer with Intesa Sanpaolo S.p.A., Hong Kong Branch.

The 10-year loan in the amount of USD 59 million, which is backed by a commercial risk insurance policy from China Export & Credit Insurance Corporation (Sinosure), would be funded at commercial rates (USD LIBOR-plus).

As progress payments during vessel construction were largely funded by Wellard through internal cash sources, a substantial portion of the finance now raised will be added to the company’s group liquidity and working capital and would be available for various corporate activities.

“We are pleased with the terms of the vessel finance arrangement we have negotiated,” said Wellard Managing Director, Mauro Balzarini.

“The long-date tenure reduces the amount of principal repayments thus enabling Wellard to use cash generated by the vessel for other general corporate activities. It also boosts our working capital headroom to fund increased livestock trading.”

M/V Ocean Shearer, completed and commissioned by the China’s COSCO shipyard, was handed over to the company in Dalian on April 28.

The vessel has the capacity to transport 20,000 cattle or 75,000 sheep or a combination of both, and is suited to trans-hemisphere routes.

In a separate announcement, the company said it has signed an agreement with the Commonwealth Bank of Australia (CBA) to extend the maturity date of its existing USD 50 million facility with CBA from December 2016 to December 2017.

Wellard said that the extended facility enables the company “to maintain financial flexibility and capture opportunities” when sourcing cattle and sheep.