Following an earlier announcement that its Mobile, Alabama facilities will be expanded to build steel ships, Austal Limited (ASX:ASB) reports the execution of a conditional agreement to purchase additional waterside land and facilities in Mobile, Alabama.
The property and facilities on the Mobile River include a dry dock capable of launching not only Austal’s current range of vessels but heavier steel ships in the future.
The agreement reached is with Modern American Recycling and Repair Services of Alabama (MARRS) and covers over 15 acres of waterfront land, buildings, and assets including an existing dry dock on the MARRS’s Mobile riverfront property
Austal says that, subject to satisfaction of the relevant conditions to purchase, the acquisition would be a useful expansion of its capacity in the Mobile area. The acquisition would support Austal USA’s new construction and service strategy by securing launch and deep water berthing capability in support of future new construction efforts including steel ships, while also giving Austal USA increased service and repair capacity in Mobile.
The acquisition is subject to a number of conditions that are required to be satisfied before completion, which is targeted to occur in the next few weeks. The specific conditions cannot be disclosed, however they are not unusual in transactions of this nature. The acquisition price is under US$10 million and will be funded from cash holdings.