Wel­lard falls on debt call


Shares in live ex­porter Wel­lard have plunged af­ter it re­vealed a de­fault had trig­gered a hike in re­pay­ments on its debt of $15 mil­lion.

Wel­lard said it was con­sid­er­ing op­tions to meet a dou­bling in monthly re­demp­tions to $US1 mil­lion and an in­ter­est rate rise from 14 per cent to 21 per cent.

They in­cluded a re­struc­tur­ing of its bal­ance sheet, in­clud­ing the pos­si­ble sale of a ship.

But the com­pany, led by ex­ec­u­tive chair­man John Klepec, warned there was no cer­tainty such op­por­tu­ni­ties could be com­pleted in the short term.

Its share price closed down 0.6¢, or 15 per cent, to 3.4¢

Wel­lard said on April 1 it had agreed to a stand­still with note­hold­ers in re­spect of cer­tain de­faults ex­ist­ing un­der its notes.

The stand­still pe­riod was sched­uled to end on Septem­ber 30, and dur­ing that pe­riod Wel­lard was to grant cer­tain se­cu­rity to the note­hold­ers.

How­ever, in an an­nounce­ment to the ASX yes­ter­day, Wel­lard said it had not been able to pro­vide se­cu­rity, so the stand­still pe­riod ended lastFri­day.

The move means note­hold­ers are en­ti­tled to de­mand im­me­di­ate re­pay­ment of the out­stand­ing notes worth $15.5 mil­lion.

“The note­hold­ers have re­served their rights, but they have said they will con­tinue to ne­go­ti­ate in good faith with Wel­lard to achieve a mu­tu­ally ac­cept­able so­lu­tion,” the state­ment said. “The end of the stand­still pe­riod has trig­gered an in­crease in the note in­ter­est rate to 21 per cent per an­num and an in­crease of the monthly re­demp­tion amounts to US$1 mil­lion, and Wel­lard will be dis­cussing these with the note­hold­ers.”

Wel­lard said de­faults on the notes also con­sti­tuted cross de­faults un­der some of its other fi­nanc­ing ar­range­ments.

Wel­lard said it was com­mu­ni­cat­ing with its other fi­nanciers in re­spect of the sit­u­a­tion, and re­mained up to date on all pay­ments to them.

The com­pany also ad­vised the mar­ket yes­ter­day that former chief ex­ec­u­tive Mauro Balzarini was no longer a di­rec­tor of Wel­lard.

Al­though Mr Balzarini’s term as chief ex­ec­u­tive ended last week, he had not been run­ning the busi­ness since 2017.

Wel­lard said Mr Balzarini’s de­par­ture was made pos­si­ble af­ter it ne­go­ti­ated the re­moval of cer­tain “key man” clauses and their con­se­quences, con­tained in a ves­sel fi­nance agree­ment with Ital­ian bank In­tesa San­paolo.

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