The federal government’s $15 billion industry fund has made its biggest defence bet yet, approving a $150 million loan to Australia’s leading F-35 Joint Strike Fighter Program supplier.
The new debt investment in Australian Sovereign Defence and Advanced Manufacturing is part of a broader $400 million financing package to refinance existing debt and fund growth.
ASDAM, which is majority-owned by funds managed by CPE Capital, will use the loan to expand its production capacity across 12 Australian sites and create around 340 new manufacturing jobs over the next three years.
The National Reconstruction Fund Corporation revealed the debt investment in ASDAM without fanfare on Friday, just hours after announcing that it was taking a $54 million stake in brain tech startup Synchron.
The NRFC said the loan– only its second defence investment to date — would support the government’s objective of strengthening Australia’s defence industrial base and reducing reliance on imported equipment.
“During uncertain times it is vital that Australia builds sovereign capability when it comes to manufacturing key defence equipment, and ASDAM has demonstrated an ability to grow and compete on a global scale in these areas,” NRFC chief executive David Gall said.
ASDAM describes itself as the country’s largest supplier to the Joint Strike Fighter Program, the United States-led effort that has delivered 72 F-35A Lightning II aircraft to the Royal Australian Air Force since 2018.
The company, which also services a number of other defence and non-defence programs, currently employs about 1,000 people across design, engineering, production and maintenance.
The ASDAM debt investment is a first for the NRFC. Other previous loans include $150 million to Brandon Capital in June, according to past quarterly investment reports.
The National Reconstruction Fund was established with $15 billion to invest in debt and equity across seven priority areas, such as medical science, defence capability and enabling capabilities such as critical technologies.
According to the NRFC’s investment guidance, investments must work to deliver policy outcomes, including “crowding-in private finance” and “growing or improving Australia’s industrial capability”.
With Justin Hendry
Do you know more? Contact James Riley via Email.