09/11/2010 - 08:03

US Navy contract changes ok: Austal

09/11/2010 - 08:03

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Shares in Austal closed up more than 15 per cent, after the shipbuilder agreed to changes to its US Navy contract to build 10 coastal warships.

Shares in Austal closed up more than 15 per cent, after the shipbuilder agreed to changes to its US Navy contract to build 10 coastal warships.

Under the changes Austal and rival tenderer Lockheed Martin will be awarded contracts to build 10 vessels each.

At the close of trade Austal shares were valued at $3.40 up 45 cents.

Today's announcement lifts the trading halt entered on Thursday, when it was reported the US Navy was in talks to buy the Littoral Combat Ships from both the Western Australian shipbuilder and Lockheed.

Austal says it has now advised the US Navy it will accept the proposed change to the Littoral Combat Ship (LCS) tender approach.

"The feasibility of the amended procurement approach to award 10 vessels each to Austal and Lockheed Martin remains subject to both Lockheed's consent and the approval of the US Congress," Austal said in a statement.

Austal said it expects Congress to make a decision by mid-December 2010.

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