Austal Limited secures $488M for US shipbuilding expansion
Austal Secures $488 Million for U.S. Expansion
Austal Limited has successfully obtained $488 million in new debt facilities to bolster its ambitious $1.2 billion capital expansion in the United States. This funding marks the final piece of financing needed for the company’s shipbuilding and submarine projects. The arrangement, which involves a consortium of tier-one banks, enhances Austal’s financial flexibility and positions the company for significant growth.
New Funding Structure Enhances Financial Flexibility
The newly secured funding comes from a mix of Australian and international banks, along with support from Export Finance Australia (EFA). This arrangement replaces Austal’s previous syndicated facilities, offering improved pricing and extended loan terms ranging from five to ten years. The refinancing is designed to provide greater financial flexibility, allowing Austal to focus on its ongoing projects without the constraints of its former debt structure.
Austal is currently engaged in two major projects in the U.S.: the Final Assembly 2 (FA2) and the Module Manufacturing Facility 3 (MMF3) for submarines. This new funding complements an earlier capital raise of $220 million in April 2025, as well as $450 million in financing from General Dynamics Electric Boat. Chief Executive Paddy Gregg emphasized that the successful refinancing reflects strong investor confidence in Austal’s future prospects.
“The successful refinancing of the company’s debt facilities positions Austal for the tremendous growth opportunities ahead,” Gregg stated. He noted that both existing and new lenders participated in the deal, which resulted in better terms and longer tenors. With this capital expansion and working capital funding secured through a mix of debt, equity, and cash flow, Austal is poised to efficiently advance the construction of both FA2 and MMF3.
Strategic Financial Moves and Future Plans
The new financing deal also includes $634 million in contingent instruments from lenders and other U.S.-based financial institutions. This support is aimed at reinforcing Austal’s existing $136 million in Go Zone Bonds through letters of credit and guarantees. As part of this transition, Austal will terminate its previous $280 million syndicated facility agreement, which included a $65 million undrawn loan sublimit.
To navigate this complex financial landscape, Austal has enlisted the expertise of Barrenjoey and Norton Rose Fulbright as advisors. With the new funding in place, the company is well-positioned to capitalize on growth opportunities and enhance its operational capabilities in the competitive shipbuilding sector.
