Austal shares gain on $220m US Navy contract win
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The news: Perth-based ship builder Austal has been awarded a USD152 million ($220 million) contract by the US Navy to invest in infrastructure for the delivery of one Columbia-class and two Virginia-class submarines each year.
The numbers: Austal said the contract is separate and in addition to the $670 million contract signed with General Dynamics Electric Boat, announced a week ago.
Austal shares gained 3.4% to $3.07 at the start of trading on the ASX.
The context: Austal said the contract provides funding for its US subsidiary Austal USA to invest as a partner in the United Submarine Alliance (USA) Qualified Opportunity Fund, a private investment fund that aims to support the expansion of the production capacity of the US submarine industrial base.
Ownership of facilities acquired by the fund will remain with the USA Qualified Opportunity Fund in which Austal USA is a limited partner, but is not part of the Austal Group.
What they said: "This contract from the US Navy to expand production capacity further strengthens the role Austal has cemented in the US submarine industrial base," Austal CEO Paddy Gregg said.
The source: ASX announcement
