Austal secures $245M debt for landing craft

• Austal secured $245 million in debt funding from the National Reconstruction Fund Corporation to support its ~$4 billion Landing Craft Heavy contract.
• Under the strategic shipbuilding agreement, all financing costs associated with the NRFC loan facility will be covered by the Commonwealth of Australia.
• The funding facility will be used to construct and fit out dedicated shipbuilding infrastructure at the Australian Marine Complex in Henderson, Western Australia.

Austal (ASX:ASB) has secured $245 million in debt funding from the National Reconstruction Fund Corporation to construct infrastructure for its ~$4 billion Landing Craft Heavy contract.

The loan facility provides crucial capital backing for the defence prime contractor following its Strategic Shipbuilding Agreement with the Commonwealth of Australia.

"This is a great example of the Strategic Shipbuilding Agreement at work, where all parties work together to achieve the best result for this critical build programme in Western Australia," said Austal CEO Paddy Gregg.

The Commonwealth of Australia will pay all funding costs associated with the debt facility, which the company stated will minimise its working capital requirements.

Following the announcement the Austal share price was up at $4.24.

Austal will build modules for the 100-metre vessel across its current and new facilities before final assembly at the Australian Marine Complex.

Barrenjoey and Norton Rose Fulbright acted as financial and legal advisors to the shipbuilder for the transaction.