Austal (ASB AU): A Hanwha Bid Is Back In Play

• The Hanwha Group has received approval from the US' CFIUS to acquire up to a 100% stake in Aussie-based shipbuilding and defense firm Austal Ltd (ASB AU).

• Hanwha currently holds 9.9% and a further 9.9% via a cash settled total return swap. Apparently Hanwha had initially filed with CFIUS to approve a 19.9% stake acquisition.

• Hanwha has also applied to FIRB to lift its position to 19.9%. It's unlikely the local regulator would block Hanwha subsequent to CFIUS' nod. Note: Austal "disputes" CFIUS' approval.

The NEW News

• Austal Ltd (ASB AU) has announced that:

it has received advice from South Korean shipbuilder and substantial Austal shareholder, Hanwha Group, that Hanwha has received approval from the Committee on Foreign Investment in the United States (“CFIUS”) to increase its shareholding in Austal up to 100 per cent ...

Hanwha currently holds a 9.9 per cent equity position in Austal, and a further 9.9 per cent economic interest through a cash settled total return swap.

Hanwha has applied to Australia’s Foreign Investment Review Board (“FIRB”) to increase its equity position in Austal to 19.9 per cent. That application is still under consideration by FIRB.

• CFIUS is an interagency committee of the US government that reviews the national security implications of foreign investments in US companies.

  • Austal operates a major US naval shipyard in the United States.

• Hanwha purchased a 9.9% stake in Austal on the 17th March at $4.45/share, and subsequently sought approvals from both the Australian and US governments to increase its holdings to 19.9%.

• Now that the US government has given the greenlight, can we expect Austal to now provide due diligence to Hanwha?