Wildcat indicates $1.35 billion for Austal's Navy yard, with less on paper than Hanwha

Austal Limited, the ASX-listed shipbuilder, told shareholders on Wednesday that a syndicate led by Wildcat Resources LLC, operating as Wildcat Infrastructure, had made a non-binding indication of interest to buy Austal USA, the Mobile, Alabama yard that builds for the US Navy and Coast Guard. The filing puts an aggregate enterprise value of US$1.25-1.35 billion on the US business, cash-free and debt-free, and only if Wildcat can run four weeks of due diligence. It does not name the other members of the syndicate behind that price.

That range sits above the US$1.05-1.20 billion Hanwha Defence USA, the US arm of the South Korean industrial group, tabled on Tuesday, August 11. Hanwha’s proposal said it was not subject to a financing condition and listed the Committee on Foreign Investment in the United States (CFIUS), the Defense Counterintelligence and Security Agency (DCSA), and Hart-Scott-Rodino antitrust clearance among the approvals required. Wildcat’s notice, as Austal filed it, names a four-week diligence period and none of those gates. The board, Austal said, “will consider” the new approach. It has approved four weeks of due diligence for Hanwha, commencing when requested information was made available, and has not disclosed that start date. Wildcat has not been granted the same window.

Two indications, different weight

Enterprise value here is the price of the business before cash and debt, so neither figure is a cheque for Austal’s listed shares. Both approaches leave those shares, and Austal’s yards in Australia, the Philippines and Vietnam, with existing holders.

Hanwha’s August proposal was an indicative, non-binding and conditional offer to acquire 100% of the relevant Austal USA holding entities, or another agreed structure. In the diligence window the board approved, Hanwha may review contracts and the trading update and engage the US Navy, the US Coast Guard and the US Department of War. Austal stated there was no certainty of a further proposal or a definitive agreement, and it did not grant exclusivity.

Wildcat said it intends to run Austal USA as a standalone platform and keep the Austal brand and the US operations. The only condition Austal disclosed is four weeks of due diligence. The notice does not state a financing commitment, an exclusivity period, or a completion timetable.

The Mobile yard both sides are pricing

What is for sale is not a financial stub. Austal USA is a prime contractor on Independence-variant littoral combat ships and expeditionary fast transports for the Navy and on Heritage-class offshore patrol cutters for the Coast Guard. It is also on the TAGOS-25 ocean-surveillance program and still has T-ATS, landing-craft utility and auxiliary-dock work in the yard. The FY2026 annual report said Austal USA was producing submarine modules for Virginia-class and Columbia-class boats under contract to General Dynamics’ Electric Boat, and that Phase 1 of a US$450 million Module Manufacturing Facility 3 came online in June. Austal’s FY2026 results presentation put the USA defence order book at about A$10.9 billion, including options and contracts still under negotiation.

The earnings attached to that book are the reason diligence is not a formality. For the year ended June 30, Austal reported group revenue of A$2.029 billion, up 11%, in Australian dollars, its presentation currency. USA segment revenue was A$1.383 billion, essentially unchanged from A$1.388 billion a year earlier, as new cutter and submarine-module work offset fading littoral-combat-ship and fast-transport programs. USA segment EBIT was a loss of A$202.8 million, against a A$97.7 million profit the year before. The annual report said that loss was primarily driven by onerous-contract provisions on the T-ATS, AFDM and LCU programs, and that Austal USA concluded in August that accelerated contractual relief would not be provided. Group EBIT was a loss of A$125.2 million. Austal said other US programs and sustainment remained profitable. OPC contract repricing was still under negotiation.

Any buyer is therefore underwriting both a Navy and Coast Guard industrial position and a set of contracts that have already produced a nine-figure non-cash hole.

A foreign buyer that has tried Austal before

Hanwha has already bid for this company once. In April 2024, Austal rejected a takeover offer from Hanwha Ocean for the whole listed group, saying it was not satisfied mandatory approvals in Australia and the United States would be secured, including from Australia’s Foreign Investment Review Board, CFIUS and DCSA. Hanwha withdrew in September 2024. This year’s proposal is for the US yard only.

Hanwha is not a first-time applicant for a US yard, either. Hanwha Systems and Hanwha Ocean completed a $100 million acquisition of Philly Shipyard in December 2024, after CFIUS approval in September 2024, and renamed it Hanwha Philly Shipyard. That deal bought a Jones Act commercial builder. Austal USA is a Navy and Coast Guard prime with nuclear-submarine module production, which is why Austal’s August filing named DCSA alongside CFIUS.

DCSA treats a company as operating under foreign ownership, control or influence when a foreign interest can direct management or operations in a way that may result in unauthorized access to classified information or adversely affect classified contracts. Hanwha’s path, if it proceeds, runs through that process. Wildcat’s path is not described in Wednesday’s notice.

Austal’s Australian franchise is not in either proposal. The FY2026 annual report said the Australasian order book was A$5.6 billion and that the Strategic Shipbuilding Agreement included more than A$5.1 billion awarded for 18 Landing Craft Medium and eight Landing Craft Heavy vessels. That book stays with Austal Limited whether Mobile is sold or not.

ASX is trading the filing; US funds have not had a session

Austal shares were at A$4.68, up 7.6%, in Wednesday trade on the ASX as of 1:26 a.m. Eastern, on volume of 2.9 million shares against a recent average of 1.9 million. The quoted equity is worth about $1.97 billion. That is not a like-for-like print against either indication: the bids are US-dollar enterprise values for the US yard only, and the stock is the whole listed group, including Australasia. The shares remain 47% below their 52-week high of A$8.82 and are down 30% this year.

One session’s bounce does not settle a contest of non-binding ranges.

A US Navy yard is being priced by two camps, and Wall Street has not opened on it. State Street’s S&P Aerospace & Defense ETF AXAR, which etf.net grades A in Defense & Aerospace, held Huntington Ingalls Industries, a US naval shipbuilder, at 2.9% of assets as of Tuesday.

Austal can grant Wildcat the four-week look it approved for Hanwha, or it can wait for Hanwha to convert an indication into something firmer. Either path still has to survive due diligence on those onerous contracts and, for a foreign buyer, the CFIUS and DCSA gates Austal named in August. Until one of those indications becomes an agreement, Mobile remains Austal’s.