Heytesbury buys stake in Wellard

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Sean SmithThe West Australian
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The $8 million paid for the stake was a premium to Wellard’s near-record low closing price.
Camera IconThe $8 million paid for the stake was a premium to Wellard’s near-record low closing price.

Paul Holmes a Court has bought into troubled live export trader Wellard, snapping up Pakistani meat trader Tariq Butt’s remaining 9.5 per cent holding.

It is believed the agreed sale scuppered advanced negotiations for the stake to be sold to Wellard’s biggest shareholder, Chinese group Fulida.

Mr Butt’s Butt Nominees said the sale was struck at 21¢ a share, or $8 million, a premium to Wellard’s near-record low closing price yesterday of 17¢, but would see the private company incur a small loss on its investment.

Mr Holmes a Court owns Heytesbury Cattle Company, which runs six cattle stations covering 2.5 million hectares in the Northern Territory and the east Kimberley.

“We are happy with our exit price and the fact the buyer is Heytesbury,” Butt Nominees director Tyron Dennison said.

“We have had approaches from other parties for our stake, but were determined to go with a credible industry participant like Heytesbury.”

Mr Butt began selling his 14.4 per cent, acquired last year, following a failed attempt to install Mr Dennison onto the Wellard board at November’s annual meeting.

Wellard had earlier indicated it would not support the bid, prompting Butt Nominees to question the independence of the board and accuse Wellard of corporate governance failings.

“Butt Nominees ... genuinely wanted to support Wellard in turning around what has been a poor financial and operating performance,” Mr Dennison said.

He said Mr Butt continued to help finance WGH Holdings — Wellard’s associate company.

Wellard shares have plunged from a float price of $1.39 on a series of profit downgrades triggered by mechanical problems on its carriers, shipping delays and high cattle prices.

It posted a $17.9 million loss for the December half, including an underlying deficit of $1.3 million before interest, tax, depreciation and amortisation. It ended the period in breach of its financial covenants but expects to receive waivers from its lenders.

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