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Fulida winners in Wellard deal

Brad ThompsonThe West Australian
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Mauro Balzarini’s grip on live exporter Wellard is slipping after he sold almost half of his shares to Chinese company Fulida as part of a deal to refinance his privately owned firm.

Lenders backing his private company, WGH Holdings, will have security over what remains of his shareholding and some lenders will have options over the shares.

The deal between WGH and Fulida should allow Mr Bal-zarini to repay $15.8 million plus $500,000 in interest owed to Wellard before a September 30 deadline.

WGH relinquished 16.58 per cent of Wellard to Fulida, which leaves it with a 20 per cent stake.

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Fulida is the second biggest shareholder, followed by Pakistani businessman Tariq Butt with about 13 per cent.

WGH transferred about 66.3 million shares to Fulida to cancel out a US$25 million debt to its partner in a joint venture to build processing facilities in China for cattle from Australia.

Wellard agreed to vary WGH’s escrow agreement to allow the share sale arrangement with Fulida to proceed.

A Wellard spokesman refused to reveal the lenders who have security and options over the WGH shares in Wellard. Under the refinancing deal, WGH subsidiary WGH Commodities, Land and Transport becomes the owner of the shares.

It is less than a year since Mr Balzarini, who is trying to sell privately owned farms in WA and his jet, moved to float the live export division of the family-owned company that began shipping livestock out of Fremantle in 1979 under his father Emilio. “I am pleased WGH will be in a position to settle the separation payment due to Wellard,” he said.

“That Fulida has taken an equity interest and agreed to voluntarily escrow its shares highlights its belief in the long-term future of our business, our industry and the potential that China represents.”

Wellard said it was scheduled to release audited full-year results on September 30.

Unaudited results released last month cast doubt on the firm continuing as a going concern. The release of the unaudited results coincided with the unexplained resignation of director Sharon Warburton.

Fulida has not indicated it wants a seat on the board, which is down to four directors including Mr Balzarini and WGH chief executive Greg Wheeler.

The Wellard share price jumped 23.4 per cent to close at 29¢ yesterday. The shares listed at $1.39 last December after an initial public offering raised $298.9 million.

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