The ASX-listed prime has unveiled plans to sell its stake in a joint venture with a Chinese shipbuilding company, in a bid to redirect resources to its defence and commercial operations in the US and south-east Asia.
In a note to shareholders, Austal has confirmed it has commenced negotiations with Guangdong Jianglong Shipbuilding Company (Jianglong Shipbuilding) to sell its 40 per cent stake in Aulong Shipbuilding — a joint venture between the two companies, established in June 2016.
Aulong was originally established to enhance commercial passenger and non-military vessel opportunities in mainland China, with Austal since licensing a number of its commercial aluminium vessel designs for marketing and construction at Jianglong Shipbuilding’s facilities in Guangdong province.
Jianglong Shipbuilding has supported the venture with its workforce of 1,000 employees across two shipyards.
However, according to an Austal spokesperson, the domestic ferry business “hasn’t grown like the company had envisaged five years ago”.
As such, the Western Australia-based firm has decided to redirect its resources elsewhere.
“Austal’s focus is moving into steel shipbuilding in the US and growing our defence and commercial business in south-east Asia, so we can’t give the Aulong JV the attention and capital it needs to grow,” the spokesperson added.
Austal aims to divest from the joint venture by 31 October 2021.
[Related: Thales, Austal sign shipbuilding MOU]