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Australian shipbuilder and defence prime Austal has entered a voluntary trading halt pending an announcement about future agreements with the Australian Department of Defence.
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Securities of Austal Limited will be placed in a trading halt until normal trading resumes on Monday, 27 November or until the announcement is released to the market, according to a public announcement made on 23 November.
“Austal requests a voluntary trading halt in its securities pending an announcement in relation to future agreements with the Commonwealth of Australia (Department of Defence),” according to company secretary Adrian Strang.
“The company requests that the trading halt takes effect immediately and continues until the release of the relevant announcement, or no later than the commencement of trading on Friday, 24 November 2023.”
It’s understood the trading halt could coincide with the possible awarding of the Australian Army’s LAND 8710-1A program. Austal has partnered with Raytheon Australia and BMT to bid for the contract with their Australian Independent Littoral Manoeuvre Vessel design to align with littoral combat focus recommended by the Defence Strategic Review released earlier this year.
Austal has previously entered a trading halt earlier this year with market commentators speculating that the defence contractor could be acquired by US private equity firms Cerberus, Arlington Capital Partners or even Western Australian investments company Tattarang, backed by mining magnate and billionaire Andrew Forrest.
Earlier this month, Austal Australia announced that they had entered a memorandum of understanding with engineering services company Harland & Wolff Group to pursue shipbuilding opportunities in the United Kingdom.
Both organisations signed the agreement at the Indo Pacific 2023 Maritime Exposition in Sydney to promote the transfer of technology, skills, and shipyard capabilities required to build the next generation of patrol vessels for the United Kingdom for maritime security agencies.
Austal Limited chief executive officer Paddy Gregg said the memorandum of understanding was the first step towards winning new business in the United Kingdom, collaborating with Harland & Wolff, an established manufacturing, services and support company operating in the maritime defence industry.
“Harland & Wolff is an ideal partner for Austal in the pursuit of defence opportunities in the United Kingdom with the facilities, expertise, and capabilities to effectively pursue and help deliver new vessels for organisations such as the UK Border Force,” he said.
The company also outlined a development focus on autonomy – outlined as a pillar of AUKUS, with progress achieved on EPF 13, Overload Unmanned Service Vessel 3 and Saildrone as a future revenue stream in the US and Australia – during an official conference call and via the Austal Annual Report 2023 in August.
Austral detailed that its total revenue for the year increased by 10.9 per cent in financial year 2023 – although earnings were negatively impacted with a further writedown on the recently commenced Towing, Salvage, and Rescue Ships program and an expected annual loss of $13.8 million – during a conference call on 31 August.
***Story updated on November 23: Following a Federal Government annoucement made on November 23, Austal has requested an end to the trading halt.***
