Austal Secures $172 Million Government Loan to Expand Shipyard

Australian shipbuilder Austal secured AUD 245 million (US$172 million) in debt financing from the National Reconstruction Fund Corporation (NRFC), a state-backed Australian agency. The funds will be used to build the infrastructure needed to fulfill the Landing Craft Heavy (LCH) contract for the Royal Australian Navy, valued at approximately AUD 4 billion.

Austal Defence Australia (ADA) confirmed that the Australian government will cover all costs associated with the NRFC loan, under the Strategic Shipbuilding Agreement and the statement of work linked to the LCH program. This arrangement aims to reduce the company's working capital requirements. The transaction is subject to finalization of the financing documents and satisfaction of customary conditions precedent; Barrenjoey and Norton Rose Fulbright advised Austal on the financing.

The financing will be used to build and equip additional shipbuilding facilities dedicated to the LCH program within the Australian Marine Complex (AMC) in Henderson, Western Australia. Ship modules will be manufactured at both Austal's existing facilities and the new ones, while final assembly and launch of the vessels, approximately 100 meters in length, will take place at the AMC itself.

ADA was awarded the LCH construction contract on February 20, 2026, valued at approximately AUD 4 billion (around US$3 billion). The contract covers eight vessels based on the Damen LST100 design, with a displacement of between 3,900 and 4,000 tonnes, capable of carrying more than 200 embarked personnel and heavy equipment such as up to six Abrams M1A2SEP3 tanks or nine Redback combat vehicles. Construction will begin this year, with delivery of the eighth and final vessel scheduled for 2038. Austal is also building, under a separate AUD 1.029 billion (US$720 million) contract at Henderson, 18 Landing Craft Medium vessels, with the final unit due for delivery in 2032.

NRFC Chief Executive David Gall noted that the investment in LCH production builds industrial capabilities that can be leveraged for future naval programs and helps reduce reliance on foreign shipyards. For his part, Austal Limited CEO Paddy Gregg stated that the financing demonstrates in practice how the Strategic Shipbuilding Agreement works, with all parties collaborating to sustain the program in Western Australia.