Submarine Corp to be sold off

Submarine Corp to be sold off

August 16, 2006

THE former Australian Submarine Corporation (ASC Pty Ltd) will be sold by the Federal Government.

Finance Minister Nick Minchin announced today that following a scoping study into the possible sale of the company, the Government had decided to put it up for a competitive tender sale.

He said the tender would most likely begin in late 2007, with a sale completed by the second half of 2008.

The sale decision had been expected.

Senator Minchin said a tender sale would protect the company's long term interests.

"It is vital that ASC continue to have access to essential technical assistance from international partners and governments," he said.

"A trade sale will allow the Government to ensure that the company's new owners are acceptable to overseas technology suppliers.

"A trade sale will also allow the Government to assess the financial strength and industrial experience that potential buyers would bring to the company.''

Senator Minchin said the Government had flagged that ASC would not be sold until the Air Warfare Destroyer and amphibious ship contracts had been decided.

He said selection of the prime shipbuilder for the amphibious ships and the "second pass approval" of the destroyer project should be completed by mid-2007.

Senator Minchin said the Government's objectives for the sale included preserving and enhancing the long term viability of ASC, to minimise ongoing risks to the Government following privatisation, and to achieve value for money from the sale.

"Any new owner of ASC will need to demonstrate its ability to comply with these sale objectives," he said.

The Government also will cap foreign ownership on the company at 49 per cent.

The chairman, chief executive officer and a majority of directors will have to be Australian citizens, while the ASC head office, substantial operations and place of incorporation will have to remain in Australia.