Debt markets help buoy Austal's huge $1.2 billion US expansion
The Henderson-headquartered business will have access to $488 million worth of debt from a group of Australian and international banks, as well as Export Finance Australia, as part of a new refinancing deal announced on Friday.
The debt sits alongside the $220 million Austal raised in March from investors, including Andrew and Nicola Forrest's investment vehicle Tattarang, after the company capitalised on a bounding run in its stock price.
Austal shares are worth about $3.69 more than this time last year as the company stares down a $14.5 billion pipeline worth of work in the US and WA.
Its advancements in the US have piqued renewed interest from South Korean defence company Hanwha, which is angling for Federal Treasurer Jim Chalmers to let them crank up their stake in the business up to 19.9 per cent.
To deliver contracts for the US Navy and US Coast Guard, Austal is building two major expansion projects in Mobile Alabama. The FA2 facility will allow Austal to assemble large steel vessels, while the MMF3 operation means it can deliver submarine modules.
Once completed, the
new facilities at Mobile
will add 2000 jobs to Austal's 3000-strong US workforce.
Chief executive Paddy Gregg said there had been strong support for the refinancing, and that Austal was positioned for 'tremendous growth opportunities'.
'Austal possesses an exceptional pipeline of long-term defence work in the US, which will be complemented by the Strategic Ship Building Agreement in Australia,' he said.
'The company now has a stronger balance sheet with enhanced liquidity at a lower cost, longer tenor, and with superior flexibility to support this growth.'
The new debt helping fund the builds replaces Austal's existing facility that was due to expire in 2026.
The shipbuilder told the market the new arrangement came with better pricing and fewer covenants. A further $634m is available via other instruments Austal said it had negotiated.
Last year Austal won a $US450m ($687.8m) contract towards the facility from General Dynamics Electric Boat.
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