You are using an older browser version. Please use a supported version for the best MSN experience.

Chinese firm grabs stake in Wellard

AAP logoAAP 19/09/2016 Petrina Berry

Chinese textile maker Fulida is set to become the second largest shareholder of livestock exporter Wellard.

Wellard's largest shareholder, WGH, a company controlled by Wellard chief executive Mauro Balzarini, has signed an agreement to transfer 66.32 million Wellard shares to Fulida.

This will give Fulida a 16.58 per cent shareholding in Wellard to become the Perth-based company's second-largest shareholder, a statement from Wellard said on Monday.

Mr Balzarini said Fulida, as a significant shareholder in Wellard, will have exposure to the full international beef supply chain into China and other countries.

"That Fulida has taken an equity interest in Wellard, 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," he said in a statement on Monday.

WGH will remain Wellard's largest shareholder with 80 million shares, amounting to a 20 per cent shareholding.

The deal will allow WGH to repay $15.8 million to Wellard, as well as pay the company about $500,000 in accrued interest by the end of September.

The announcement of the refinancing came as The Australian newspaper reported mining magnates Gina Rinehart and Andrew Forrest are among several suitors interested in acquiring Wellard.

Wellard has endured a tumultuous 10 months since listing on the Australian Securities Exchange at an issue price of $1.39 a share, including a profit warning in July and a disappointing full-year result.

The group missed its prospectus forecasts on revenue, profit and margins, booking a $23 million annual loss instead of the forecast $9 million net profit earlier this month.

The company has previously said a sharp reduction in cattle supply in Australia and record high cattle prices significantly hurt its trading margins.

Shares in Wellard, which listed on the share market in December 2015, last traded at 29.5 cents - up six cents - on Monday during a shortened trading session in which the ASX was interrupted and eventually halted mid-afternoon by technical troubles.

image beaconimage beaconimage beacon