Austal Limited (ASX:ASB) shares are in a trading pause after Treasurer Jim Chalmers approved a move by South Korea’s Hanwha Group to lift its stake in the ASX-listed shipbuilder to 19.9%.
The decision clears the way for Hanwha to become Austal’s largest shareholder, edging out Andrew and Nicola Forrest’s private investment vehicle Tattarang, which holds a 19.28% interest.
Hanwha will be allowed to acquire a further 10% of Austal’s shares, taking its holding to 19.9%, following the Treasurer’s endorsement of the Foreign Investment Review Board’s recommendation.
Ceiling hit
The approval follows a bitter dispute over Hanwha’s abandoned $2.85-per-share takeover offer last year. Hanwha walked away from that proposal after claiming Austal’s board, then chaired by founder John Rothwell, had made due diligence impossible. Rothwell stepped down as chair in July 2024 and retired from the board in September, having urged Dr Chalmers not to approve Hanwha’s stake increase.
Tattarang has previously indicated it sees no role for Hanwha in the running of the company.
Dr Chalmers said on Friday the decision was “not taken lightly” and reflected “the relevant economic, national security and other national interest issues”. He stressed that Hanwha will not be permitted to raise its stake above 19.9% under the terms of the approval.
“This decision ensures there are greater protections for our Strategic Shipbuilder and the Government’s sovereign interests in Austal,” he said.
If Hanwha’s share acquisition proceeds, it will be subject to conditions limiting who the company can nominate to Austal’s board, restricting access to sensitive information and imposing controls over how such information is stored.
Austal shares were last traded at $6.42.