Hanwha has dismissed speculation that its attempt to increase its stake in Australia-headquartered shipbuilder Austal could face pushback from the Australian government.
Austal announced Tuesday that the Australian government approved the terms of their strategic shipbuilding agreement so it will establish Austal Defence Australia to become the authorities’ prime contractor for building and delivering landing crafts.
According to Austal, the Australian government will be issued a single sovereign share in Austal Defence Australia to protect its interest in continuous building and enter into a shareholders deed with Austal to regulate the newly established entity.
The shareholders deed will grant the Australian government a call option over Austal’s shares in Austal Defence Australia, in certain circumstances such as a third party’s acquisition of Austal’s control or a relevant interest in acquiring more than 20 percent of Austal.
Hanwha previously pushed for a takeover of Austal last year but came up short as Austal declined the offer over concerns of disapproval from the Australian government. Instead, Hanwha acquired a 9.9 percent stake in Austal in March this year.
“Austal’s announcement today does not have anything to do with Hanwha’s ongoing works for buying shares of Austal,” said a Hanwha official Wednesday.
“Hanwha Group has secured a 9.9 percent in Austal and now is waiting for the Australian government’s approval to make it 19.9 percent. Through this, Hanwha Group plans to strengthen strategic partnerships in regions such as the United States.”
Austal, which operate US shipyards in Mobile, Alabama and San Diego, California, is one of the four key contractors for the US Navy as its holds a market share between 40 to 60 percent in the US small US small surface vessel and auxiliary ship market.
“(The establishment of Austal Defence Australia) intends to protect (Australia’s) defense shipbuilding sector and does not appear to be related to (Austal’s) US businesses,” said a shipbuilding industry official.
“The terms show that it’s okay for a third party to acquire up to a 20 percent stake in Austal so that could mean that the Australian government is leaning toward approving (Hanwha’s proposal to buy a stake of up to 19.9 percent in Austal.)”
hwkan@heraldcorp.com
