Andrew Forrest moves to gain boardroom influence at Austal

Andrew Forrest. Picture: Martin Ollman, NCA NewsWire

The billionaire founder of Fortescue Metals, Andrew Forrest, is believed to be pushing to gain a seat on the board of Austal after its chairman John Rothwell moved to the position of director.

Dr Forrest’s private investment vehicle Tattarang owns 19.61 per cent of Austal, which was subject to a $1bn bid by South Korean ship builder Hanwha in March, as revealed by DataRoom at the time.

Austal announced on Thursday that former US Secretary of Navy Richard Spencer will replace Mr Rothwell as chairman.

Mr Spencer is also the global chair of Bondi Partners, the firm of former treasurer Joe Hockey that has been an adviser to Austal.

However, with Mr Spencer based offshore, observers of the Austal battle believe that Mr Rothwell will still likely assert strong influence on the Austal board.

He founded the company in 1987 and has been on the board since, growing the business from commercial shipbuilder to ASX-listed international defence contractor with a multibillion-dollar order book.

Tattarang has declined to comment on Dr Forrest’s position about a buyout of the business, but his move to nominate a representative on the board at Austal’s next annual general meeting suggests he wants his business interests to have a greater say surrounding the company’s business dealings and future.

DataRoom revealed in March that Hanwha had put forward a $1bn bid for the company that was rejected on grounds it would unlikely gain regulatory clearance on national security grounds.

Defence Minister Richard Marles has since said the government would not stand in the way of an acquisition, but Hanwha has struggled to gain data room access for due diligence on the company.

Hanwha already carries out other defence contracts for the government, including two multibillion-dollar programs for the Australian Army in the Huntsman self-propelled howitzer and the Redback Infantry Fighting Vehicle.

It is understood Austal viewed Hanwha’s earlier offer as too low in value as well as doubtful from a regulatory perspective.

Hanwha lately has been keen to relay the message that the US government would also be comfortable with Austal’s ownership and has already just purchased a US ship builder, Philly Shipyard.

Austal was named in November as the government’s strategic shipbuilder in WA for the building of defence vessels.

It also has extensive US government contracts, and is a likely partner in WA-based AUKUS contracts.

Hanwha has said it is a “credible buyer”, and was of the view it would gain Foreign Investment Review Board approval.

But Austal was awarded government contracts because it was Australian owned and based on home ground, with local ship building capability, even though it was not the lowest bidder.

Mr Marles said any deal involving Austal would require strict security arrangements.