Austal Limited (ASX: ASB) shares rallied after the Australian shipbuilder received an indicative offer from South Korea’s Hanwha Group to acquire its United States business.
Hanwha Defence USA has proposed an enterprise value of between US$1.05 billion and US$1.20 billion for Austal USA on a cash- and debt-free basis, subject to normalised working capital and customary transaction adjustments.
The proposal is preliminary, non-binding and conditional. It does not include Austal’s publicly traded shares or its core Australasian operations in Australia, the Philippines and Vietnam. Consequently, Austal’s 15-year Strategic Shipbuilding Agreement with the Australian Government remains unaffected. At the time of writing on 11 August 2026, Austal shares had surged approximately 16.67% to trade at A$4.48, as investors reacted positively to Hanwha’s indicative proposal for the Company’s US operations.
Austal Limited – Daily Chart (Source: TradingView)
Austal’s Board has determined that the proposal warrants further evaluation and has granted Hanwha a four-week due diligence period, beginning when the requested information becomes available. Hanwha will review Austal USA’s contracts, engage with key government counterparties and progress potential transaction documentation.
The offer remains subject to satisfactory due diligence, definitive agreements and regulatory approvals, including potential clearance from the Committee on Foreign Investment in the United States and other US defence and competition authorities. However, the proposal is not subject to a financing condition.
The development coincided with a major FY2026 trading update. Austal now expects Austal USA to record an unaudited EBIT loss of approximately A$175 million after reassessing the recoverability of claims associated with certain legacy contracts. The adjustment primarily relates to non-cash provisions covering the T-ATS, AFDM and LCU programmes.
As a result, Austal expects an unaudited Group EBIT loss of approximately A$113 million for FY2026, compared with its previous guidance of approximately A$110 million in positive EBIT. In contrast, the Australasian business is expected to deliver EBIT of approximately A$62 million.
Management emphasised that the provisions are non-cash and do not impair Austal USA’s underlying operational capabilities. Austal USA has commenced formal contractual recovery processes, although the timing and outcome remain uncertain.
Austal also reported a strong liquidity position, with A$366 million in cash, net cash of A$240 million and A$435 million in undrawn debt facilities as of 31 July 2026. Its order book stood at approximately A$17 billion.
The proposal could unlock substantial value from Austal’s US operations while preserving its Australasian shipbuilding platform. Nevertheless, investors should recognise that there is no certainty Hanwha will submit a final proposal or that a binding transaction will be completed.
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