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Sometimes the ASX moves in interesting ways, and that’s definitely the case for former live exports player Wellard’s (ASX:WLD) Tuesday suggestion that it’s probably de-listing.
Wellard has now officially sold off its last remaining export vessel, the MV Ocean Drover, netting around A$80 million from a Turkish company that will now be taking the Drover into its own shipyards.
But with that, Wellard stated on Tuesday it had now lost its only real remaining money-maker. The only income stream the company now sees is participation in a long-running class action the Australian government has already thrown up roadblocks towards paying out.
For 46 years, Wellard was involved in Australia’s live exports trade, but things soured in the 2010s when the Gillard gov’t banned live cattle exports to Indonesia.
A class action consisting of 215 claimants from across the beef industry was launched in 2014, but last year, Canberra decided it wasn’t going to pay out settlements on the grounds its export ban was illegal.
One company got paid – Brett Cattle – but Wellard, a class member, is still waiting.
It’s been a slow suffocation for the company ever since. This is especially true as anti-export attitudes across Australia have grown in mainstream popularity (to the chagrin, fairly, of just about everyone who lives in the regions broadly).
Consider WA’s ‘Keep the Sheep’ campaign for evidence of a shift in public consensus – or perhaps more importantly, that it wasn’t enough to sway that state’s gov’t.
So with Wellard now a still-unpaid constituent of the Brett class action; that class action being the only way left for the Aussie company to make money, and, a Federal government that doesn’t want to pay any other claimants – it’s perhaps unsurprising Wellard brought up de-listing off the ASX on Tuesday.
“Given the sale of the Drover, which represents Wellard’s sole remaining revenue-generating asset, and the costs of remaining a publicly listed entity, Wellard’s Board will consider the best structure for the business, including the possibility of delisting from the ASX, and continuing as a public unlisted company,” the company wrote.
So it’s interesting, then, that the company’s price jumped at all – nonetheless over 100%, despite relatively thin trades. On December 31, 2015, shares were worth $1.46/sh.
They were worth just over 20c a year later, and since then, have floundered below that level. Until now.
A 100% increase based on just under $1M in Tuesday trades (as at 4.30pm Sydney time) saw the share price return to 15cps, which is great until you consider the company is probably going to de-list.
While the company used the term “possibility of delisting from the ASX,” it’s hard to see where else the company can go from here from a value generation POV.
Then there’s the fact executive chairman John Klepec essentially gave the company a eulogy on Tuesday.
“Subject to shareholder approval the sale of the M/V Ocean Drover will bring to an end Wellard’s 46-year involvement in the global live export industry,” Klepec said.
“I thank our many local and international customers and other stakeholders, particularly current and former staff and service providers, who have been supportive of Wellard’s business throughout its journey.”
Whoever bought shares on Tuesday may want to reconsider.
WLD last traded at 15cps.
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