Austal to raise up to $220m to fund US shipyard expansion
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More news: Austal has announced an institutional placement to raise up to $200 million to fund the expansion of its shipyard in Mobile, Alabama.
It will also carry out a share purchase plan for eligible shareholders of up to $20 million.
The placement will see the issue of around 52.6 million new shares at a price of $3.80 per share, representing a 15.6% discount to Austal's last closing share price of $4.50.
Net proceeds of the equity raise will be used to partly fund the Final Assembly 2 (FA2) infrastructure expansion project, supporting the delivery of large steel vessels in the US.
Construction of FA2 recently commenced, and includes a new assembly building, waterfront improvements and a new ship lift system.
Total capital investment in FA2 is estimated to be US$300 million ($478 million), to be phased over FY25 to FY27 and funded through the equity raising and new debt facilities.
Austal previously received a letter of support from an unnamed Australian government financing agency for approximately 50% of the financing required for the FA2 project, for a period of up to 10 years.
FA2 is expected to be operational in FY26 and completed in FY27.
Austal also reiterated its record order book of $14.2 billion and reconfirmed its full-year earnings guidance of no less than $80 million.
What they said: "This announced raise will ensure that Austal is appropriately funded for FA2, which one complete, will facilitate the delivery of large steel vessels in the current pipeline for the US Navy and ensure Mobile continues to be well placed to execute on future opportunities," said Austal CEO Patrick Gregg.
Austal halts trading as it completes equity raise
The news: Ship builder Austal has entered a trading halt on the ASX, pending an announcement in relation to an equity raise.
The numbers: Austal shares last closed at $4.50, having more than doubled in value over the last 12 months.
The context: Australia's largest defence exporter has requested that the trading halt remain in place until it announces the completion of the institutional component of the equity raise, expected before 13 March.
