Austal : Unmarketable Parcel Share Sale Facility

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COMPANY ANNOUNCEMENT 7 FEBRUARY 2022

UNMARKETABLE PARCEL SHARE SALE FACILITY

Austal Limited (ASX: ASB) is pleased to advise that it has established an Unmarketable Parcel Sale Facility (Facility) for shareholders who hold less than A$500 worth of fully paid, ordinary shares in the Company (Shares), (Unmarketable Parcel).

Based on the price of Shares at the close of trading on Friday, 4 February 2022 (Record Date) of A$2.060 a holding of less than 243 Shares constitutes an Unmarketable Parcel.

The Company is providing the Facility to enable holders of Unmarketable Parcels to sell their Shares without having to act through a broker or incurring any brokerage or handling costs that would otherwise make a sale of their shares uneconomic or difficult. The Company will pay all costs associated with the sale and transfer of Shares through the Facility (excluding any tax consequences of the sale, which will be the responsibility of relevant shareholders).

The Company expects the sale of the Unmarketable Parcels through the Facility will also benefit the Company, as it is expected to help to reduce administrative costs, including printing and mailing costs and share registry expenses associated with maintaining a large number of Unmarketable Parcels.

In accordance with the Company's Constitution and the ASX Listing Rules, the attached letter and share retention form (Share Retention Form) will be sent to all shareholders who hold an Unmarketable Parcel on the Record Date.

Shareholders with Unmarketable Parcels wishing to take advantage of the Facility and have their shares sold by the Company do notneed to take any action. Shareholders who hold an Unmarketable Parcel and wish to retain their Shares must "opt-out" of the Facility by returning their duly completed Share Retention Form to the Company's share registry (Link Market Services Limited) in accordance with the instructions on the Share Retention Form, by no later than 5:00pm (AEST) on Wednesday, 23 March 2022 (Closing Time). Any shareholder who holds an Unmarketable Parcel and does not return a duly completed Share Retention Form by the Closing Time will have their Shares sold through the Facility.

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Austal has appointed Euroz Hartleys as Sale Agent to sell the Shares under the Facility, and the proceeds from the sale of the Shares will be remitted to participating shareholders as soon as practicable following settlement of all Shares sold through the Facility.

The key dates in relation to the Facility are set out below:

EVENT	DATES
Record Date for establishing holders of Unmarketable Parcels	Friday, 4 February 2022
ASX announcement regarding Unmarketable Parcels Sale	Monday, 7 February 2022
Facility
Letter and Share Retention Form despatched to shareholders	Wednesday, 9 February
holding an Unmarketable Parcel	2022
Closing Time for receipt of completed Share Retention Forms	5:00pm (AEST),
	Wednesday 23 March
	2022

Austal reserves the right to change any of the dates referred to in this announcement or the enclosed letter and Share Retention Form, or to vary, cancel or delay the Facility or the sale of Shares at any time before Shares are sold, by making an announcement to ASX.

The Company has the ability to establish the Facility and facilitate the sale of Unmarketable Parcels under rule 5.4 of the Constitution and rule 15.13 of the ASX Listing Rules.

The Company does not provide any recommendation or advice as to whether shareholders holding an Unmarketable Parcel should sell or retain their Shares.

If you have any questions about the operation of the Facility, please contact the Company on [phone].

Below is the letter sent to eligible shareholders enclosing the Unmarketable Parcel Sale Facility terms and conditions.

This ASX announcement has been approved and authorised for release by Paddy Gregg, Austal Limited's Chief Executive Officer.

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-ENDS-

Media Contact:

Cameron Morse

[phone] [e-mail]

About Austal:

Austal is Australia's global shipbuilder and defence prime contractor designing, constructing and sustaining some of the world's most advanced commercial and defence vessels.

For more than 30 years Austal has contracted more than 340 vessels for over 121 commercial and defence operators in 59 countries, worldwide.

Austal is Australia's largest defence exporter and first ASX-listed shipbuilder. Austal has industry- leading shipyards in Australia, the United States of America, Philippines and Vietnam with service centres worldwide, including the Middle East.

Austal delivers iconic monohull, catamaran and trimaran commercial vessel platforms - including the world's largest trimaran ferry and multiple defence programs such as the Littoral Combat Ship (LCS) and Expeditionary Fast Transport (EPF) for the United States Navy.

Austal has grown to become the world's largest aluminium shipbuilder and is Australia's largest defence exporter.

Austal Limited ACN 009 250 266

100 Clarence Beach Road

Henderson, Western Australia 6166

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9 February 2022

Dear Shareholder,

Austal Limited ("Austal" or "Company") - Sale of Unmarketable Parcels of Shares Facility

Austal is pleased to advise that the Company has established an Unmarketable Parcel Sale Facility (Facility) for holders of parcels of fully paid ordinary shares in the Company (Shares) with a market value of less than A$500 as at the close of trading on Friday, 4 February 2022 (Record Date), (Unmarketable Parcel).

Based on the price of Shares on the close of trading on the Record Date of A$2.060, a holding of less than 243 Shares constitutes an Unmarketable Parcel.

Austal appreciates that Unmarketable Parcels can be difficult or expensive to sell, so the Company is offering the Facility to enable shareholders who hold an Unmarketable Parcel to sell their Shares without having to act through a broker or pay brokerage or handling fees. The Company will pay all costs associated with the sale and transfer of Shares through the Facility (excluding any tax consequences of the sale, which will be the responsibility of relevant shareholders).

The sale of Unmarketable Parcels through the Facility will also benefit the Company, as it is expected to significantly reduce the administrative costs associated with maintaining a large number of small shareholdings on the Company's share register.

Austal has the ability to establish the Facility and facilitate the sale of Unmarketable Parcels under rule 5.4 of the Company's Constitution (Constitution) and rule 15.13 of the ASX Listing Rules.

Why are you receiving this letter?

Our records indicate that you held an Unmarketable Parcel of Shares based on the price of Shares of A$2.060 as at close of trade on the Record Date. Unless you advise the Company by 5:00pm (AEST) on Wednesday, 23 March 2022 (Closing Time) that you do NOT wish to sell your Shares, the Company intends to sell your Shares through the Facility in accordance with rule 5.4 of the Constitution and rule 15.13 of the ASX Listing Rules.

To advise the Company that you do NOT wish to sell your Shares, you must complete the share retention form (Share Retention Form) enclosed with this letter, and return it to the Company's share registry, Link Market Services Limited (Link Market Services), in accordance with the instructions on the Share Retention Form, prior to the Closing Time.

If, at the Closing Time, the value of your Shares has increased such that you no longer have an Unmarketable Parcel (e.g., due to an increase in the market price of Shares or the number of Shares you hold), your Shares will NOT be sold.

For personal use only

If you have multiple holdings of Shares which, if aggregated, would not constitute an Unmarketable Parcel, you may contact Link Market Services at 1300 554 474 (within Australia) or [phone] (outside Australia) to amalgamate your holdings. In these circumstances, your Shares will not be sold.

Please also note that pursuant to rule 5.4(h) of the Constitution and rule 15.13.5 of the ASX Listing Rules, the Company will not sell your Shares in the event that a third party announces a takeover offer for the Company.

In accordance with its continuous disclosure obligations, the Company may release information to the ASX which may affect your decision as to whether you wish to sell or retain your Shares. If such information is released, it will be published on the ASX website (www.asx.com.auASX code: ASB) and on the Company's website (www.austal.com).

You should be aware that the fact that your holding of Shares is described in this letter as an "unmarketable parcel" does not mean that you cannot sell your Shares at any time. The use of the term "unmarketable parcel" in this letter is to identify the value of Shares which are eligible for sale through the Facility.

What do you need to do?

As a holder of an Unmarketable Parcel as at the Record Date, your options are described below:

1. Sell your Unmarketable Parcel

If you WISH TO SELL your Shares through the Facility, you should TAKE NO ACTION. By refraining from taking any action, you will be deemed to have irrevocably appointed the Company as your agent to:

1. sell, or procure the sale of, all of your Shares at a price to be determined, without any costs being incurred by you; and
2. deal with the proceeds of the sale as set out in this letter (for more information about the payment of the sale proceeds through Link Market Services, please refer to Question 9 of the enclosed Terms & Conditions).

The Company has appointed Euroz Hartleys (Sale Agent) to facilitate the sale of the Unmarketable Parcels. Payment for your Shares will be remitted to you by Link Market Services on behalf of the Company as soon as practicable, following settlement of the sale of all Shares sold through the Facility.

2. Retain your Unmarketable Parcel

If you DO NOT WISH TO SELL your Unmarketable Parcel, you MUST OPT-OUT of the Facility by completing and returning the enclosed Share Retention Form in accordance with the instructions on the Share Retention Form so that it is received by Link Market Services prior to the Closing Time.

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