The Austal Limited (ASX: ASB) share price is sinking into negative territory during lunchtime trade. This comes after the shipbuilder announced its new bid to supply upgraded littoral manoeuvre capability for the Australian Army.
At the time of writing, Austal shares are swapping hands for $2.23 apiece, down 1.33%.
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Austal enters tender process
Investors are dragging the Austal share price lower despite the company announcing its new contract opportunity.
In a statement to the ASX, Austal advised it will submit a proposal to design, build and service the Australian Army's next generation of littoral — or shoreline — capability.
The Department of Defence's LAND 8710 (Phase 1) project is seeking to develop a new amphibious vehicle and independent landing craft. They're scheduled to replace the Army's lighter amphibious cargo vehicle and current landing craft mechanised (LCM-8) vessels.
The Australian-built amphibious vehicles and landing craft will aim to provide improved speed and protection in transporting land forces.
In February this year, the federal government announced plans to invest $800 million into the project. The new vehicles and vessels are expected to be integrated into the Army from 2026.
Austal CEO Paddy Gregg reinforced the company's capability, saying:
Austal is Australia's proven defence prime contractor that has designed, constructed and sustained multiple naval shipbuilding programs for Australia, and export markets around the world, for more than 20 years.
Drawing upon this local strength in defence capability, including Australia's largest team of naval architects, Austal is confident of offering an exceptional new littoral manoeuvre capability for the Australian Army that may be relied upon throughout its working life.
The company has vessel manufacturing and service facilities across Western Australia, Queensland, and the Northern Territory. As Australia's premier shipbuilder, Austal supplies some of the world's most advanced defence vessels.
Currently, the company is partnering with more than 1,200 businesses across the country to deliver projects such as replacing the guardian-class patrol boats used as part of Australia's maritime security program in the South Pacific.
About the Austal share price
It's been a difficult 12 months for the company's shareholders, watching their holdings fall in value by almost 40%. Although the Austal share price has failed to launch recently, for the company, it's business as usual.
Austal has been busy completing its guardian-class patrol boats contract, with 12 vessels now delivered. A total of 9 patrol boats remains to be fulfilled, with 6 currently under construction.
Austal has a market capitalisation of roughly $803 million, ranking it 332 out of the 2,255 companies on the ASX.
