VEEM Limited (ASX: VEE), a designer and manufacturer of disruptive, high-technology marine propulsion and large Gyro stabilization systems, has announced the successful completion of a $14 million placement to institutional and sophisticated investors. The company, which also operates as an Australian Defence manufacturer, will allocate the proceeds towards expansion in the defence sector, bolstering working capital, and strengthening its balance sheet. The Miocevich family will subscribe for $1 million under the Placement, subject to shareholder approval, and Perennial Value Management Limited, the company’s major shareholder, is subscribing for $2.7 million under the Placement.
The capital injection comes as VEEM reports significant progress in the defence arena. A key highlight is the signing of a 9-year Manufacturing Licence Agreement (MLA) with Northrop Grumman to supply equipment into the USA defence supply chain, with an initial value of up to US$33 million that could increase. VEEM has also achieved Level 1 accreditation with Huntington Ingalls Industries – Newport News Shipbuilding (HII-NNS) and received its first request for quote (RFQ), positioning the company to manufacture Level 1 certified components.
These achievements, coupled with the recent Huntington Ingalls Incorporated Newsport News Shipbuilding agreement, qualify VEEM to provide manufacturing for two of the largest US defence supply companies. To further bolster its expertise in the sector, VEEM has appointed David Singleton as a Non-Executive Director. Singleton brings 25 years of defence-related experience, including a stint as Managing Director of Austal Limited (ASX: ASB).
VEEM’s Managing Director Mark Miocevich noted the company has successfully re-positioned itself as a high-quality defence contractor and the agreements with HII-NNS and Northrup Grumman, together with the order pipeline for ASC and Austal, demonstrate they have now met the requirements of this huge market and are starting to reap the rewards.
