Austal Wins $516 Million US Navy Contract

Austal has secured a $516 million contract to construct the lead ship of the United States Navy's ocean surveillance program, T-AGOS 25, the Australian defence shipbuilder said in an exchange filing on Friday.

The contract, announced on May 19, was originally for $113.9 million for a detailed design of the Auxiliary General Ocean Surveillance Ship T-AGOS 25 Class for the United States Navy, with options to design and construct up to seven such ships.

On Friday, the United States Navy exercised its option to modify the contract to construct a ship, allowing Austal to buy the materials required to continue building the surveillance vessel.

If all options under the contract are exercised, the cumulative value of the order amounts to $3.20 billion, Austal added.

T-AGOS ships, operated by the United States Military Sealift Command (MSC), support the antisubmarine warfare (ASW) mission of the commanders of the Atlantic and Pacific Fleets, the shipbuilder said in its statement.

(Reuters - Reporting by Sameer Manekar; Editing by Sohini Goswami and Janane Venkatraman)