Wellard (ASX:WLD) has secured full and unencumbered ownership of the M/V Ocean Drover after agreeing to a US$5 million ($7.3 million) payment to KPMG Singapore, the liquidators of Ruchira Ships.
The agreement resolves a reconveyance issue dating back to June 2023 when Ruchira defaulted on transferring the vessel's title due to a mortgage held by United Overseas Bank.
Wellard's Executive Chairman, John Klepec, stated, "We have taken a commercial approach to avoiding lengthy and expensive litigation that we would have taken to enforce our rights. The extensive negotiations have resulted in a fair and reasonable outcome for the parties involved and was a major focus of Wellard management."
According to Klepec, this resolution provides certainty of ownership of the Drover to Wellard and its shareholders.
Moreover, the resolution has enabled the Wellard board to commence a strategic review to determine the best path forward for the company, which will become a single-ship business following the recent sale of the M/V Ocean Ute on Sept. 3.
"The review will assess a range of considerations, including the long-term future of the company and its assets, the current and future commercial environment, the most appropriate company structure, and how to maximise returns to shareholders from the Drover," added Klepec.
The ownership issue originated when Ruchira's lender, United Overseas Bank, refused to discharge a mortgage on the Drover, leading to KPMG’s appointment as the liquidator.
Despite this, Wellard maintained operational control of the vessel under a long-term bareboat charter and continued trading on high-demand routes between South America and Turkey.
Wellard expects the reconveyance of unencumbered title to the Drover to be completed by Oct. 14.
At the time of reporting, Wellard's share price was $0.057.