Austal Secures $1.3 Billion U.S Navy Contract For Building Three Medical Ships

Austal, the Forrest family-backed shipbuilder, has reportedly won an almost-$1.3 billion contract for designing and building three medical vessels exclusively for the US Navy. The most recent US Navy deal comes as the Perth-headquartered firm – with an order book which already stands at $11 billion – continues attracting interest from a field of private equity funds.

The three vessels will be constructed by Austal, a reliable supplier of ships to the US Navy, at the firm’s shipyards in Mobile, Alabama. The new deal is timely as work starts running out on the Expeditionary Fast Transport program. Austal said work would begin on the medical vessels once it executed the last fast-transport expeditionary vessel.

The $US867.6 million deal covers the final design and the construction of three Expeditionary Medical Ships. Besides, the medical vessels are a specialist version of the aluminium twin-hull catamaran fast transport expeditionary vessels to be built at Mobile. Austal’s chief executive, Paddy Gregg, said the medical vessels would facilitate complex medical procedures and operations to be executed while at sea.

The three emerging EMS will boost the US Navy’s capability in providing efficient medical as well as surgical support anywhere in the world, Austal CEO Paddy Gregg said that the medical vessels would help enable crucial medical procedures as well as operations to be performed seamlessly while at sea.

Austal’s work in the US covers battleships, coastguard vessels, and components for the Virginia-class nuclear-powered subs – the submarine class Australia will be under the AUKUS deal with both the US and the UK. The shares of Austal rose over 5% to $1.82 in trading on Friday.

The US Navy has included onerous change-of-control provisions in its deals with Austal, which restricts the field of potential purchasers. JP Morgan has been handling the takeover interest that has long swirled around Austal for nearly two years. Cerberus Capital Management and JF Lehman & Company, two US investment firms, have been declared the frontrunners.

Andrew and Nicola Forrest own 19.6 % of the stock via the private Tattarang investment vehicle and have installed former Australian rear adm. Lee Goddard, the chief executive of the Australian Missile Corporation, is their representative on Austal board.

Reference: AFR

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