Jim Chalmers to make call on whether South Korean conglomerate can plant flag in WA shipbuilder by September

Federal Treasurer Jim Chalmers insists he will be “methodical” and “considered” in deciding whether a South Korean company should be allowed to own the lion’s share of Australia’s biggest defence shipbuilder. Dr Chalmers revealed on Tuesday that it would be another four months before a decision regarding Hanwha’s bid to lift its stake in the Henderson-based manufacturer. “The statutory deadline for that is still not until I think the first week of September, so we are considering that one. The Foreign Investment Review Board is compiling its advice to me.” The Treasurer was careful not to give an indication either way as to whether it would allow Hanwha to lift its ownership of Austal beyond 9.9 per cent to 19.9 per cent. Hanwha has said taking over Austal is not its “current intent”, but a stake of that size — generally considered the takeover threshold in Australia — would put the conglomerate in prime position to do so. It would also see Hanwha overtake Tatarrang — the investment company of Andrew and Nicola Forrest that has proclaimed Austal to be a “sovereign champion” for Australia — as the stock’s largest shareholder. The transaction has garnered significant political and corporate interest due to the sensitive material and information the defence company handles through its contracts with the US. Austal is also the only foreign company that designs, builds and services ships for the US navy and derives most of its revenue from operations in Mobile Alabama. Hanwha’s interest has raised the question as to whether it is appropriate for a foreign, albeit allied country, to have a controlling stake in a company considered central in Australia and the US’s defence ties. “(I’m) not going to pre-empt that advice or the decision that I have to take on that . . .I will come at that decision in the same methodical, considered, consultative way that we come at all of these big decisions on foreign investment,” Dr Chalmers told media. Austal has already disagreed with claims made by Hanwha last week that the Committee on Foreign Investment in the United States had granted clearance for the pursuer to buy up to 100 per cent of Austal. The WA-based business argued the approval “is different to that claimed by Hanwha”, and suggested the clearance was only for Hanwha to increase its stake to 19.9 per cent, not for a move to full ownership. Hanwha had its second crack at Austal in March, buying 9.9 per cent of the shipbuilder’s shares to the surprise of its target after failing to even get due diligence access to the business six months earlier. Defence Minister Richard Marles said at the time that he was “comfortable” with where Austal was at and that the ownership matter was “ultimately a matter” for the two companies. Austal shares were down 1.87 per cent at 1:39pm AWST at $6.28.