CONSTRUCTION and engineering services provider Civmec has signed a non-binding heads of agreement with German shipbuilder Naval Vessels Lurssen (NVL) for the transfer of ownership of its subsidiary Luerssen Australia.
Once the potential transaction is completed, NVL will transfer all its shareholding in Luerssen Australia to Civmec, including all assets, employees and licences.
This will ensure the “uninterrupted design and build” of six offshore patrol vessels for the Royal Australian Navy under an existing contract with the Australian Department of Defence – Luerssen Australia’s sole business, done at a shipyard in South Australia and the Civmec-owned facility in Western Australia, said Civmec in a Tuesday (Oct 15) bourse filing.
The proposed change of ownership and control of Luerssen Australia will be subject to the government’s approval.
To obtain the necessary consent as soon as possible, Civmec said the group and Luerssen Australia will immediately begin engagements with the authorities on the required administrative approval process and work towards a target date of Dec 31.
At the same time, the group will conduct necessary due diligence and detailed planning, since the non-binding agreement is subject to satisfactory due diligence and the fulfilment of certain conditions.
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“The immediate priority is to agree on a framework for the interim period in which Luerssen Australia and Civmec will closely cooperate in managing (the existing contract), ensuring that (the Department of) Defence, the Royal Australian Navy and industry all benefit from the efficiencies and advantages of the agreement,” said Civmec.
Civmec executive chairman Jim Fitzgerald said the acquisition of Luerssen Australia is a “natural step” for the company, as a sovereign Australian shipbuilder with world-class shipbuilding facilities and an experienced shipbuilding workforce.
“Having worked on the project since 2018, we’re confident in our ability to execute the remaining work scope and ensure a smooth transition for all stakeholders,” he added.
Tim Wagner, Luerssen Australia’s chairman and chief executive of NVL, added that he is confident in Civmec’s ability to finish the remaining works, and assured that NVL will support the group until it successfully completes the existing project.
“We appreciate there are many details to work through, and we look forward to engaging with all stakeholders, including the Commonwealth, Luerssen Australia employees and suppliers to ensure a smooth and successful transition,” said Wagner.
Shares of Civmec closed at S$1.04 on Tuesday, down 2.8 per cent or S$0.03, before the announcement.
