VEEM to Raise $14m after Signing Licence Agreement with Northrop Grumman

VEEM (ASX: VEE) has taken a decisive step in its defence growth strategy, completing a $14 million placement while securing a nine-year manufacturing licence agreement with global prime Northrop Grumman.

The agreement allows VEEM to supply precision components into the US Navy’s Virginia Class submarine program, initially valued at up to US$33m with scope to expand as production ramps up.

Managing director Mark Miocevich said the combined funding and contract mark a turning point for VEEM, confirming its transformation into a recognised defence supplier with exposure to global naval shipbuilding programs.

Northrop Grumman Agreement Opens Doors

The licence deal with Northrop Grumman represents VEEM’s entry into the US submarine supply chain, one of the most strategic defence markets globally.

Under the agreement, VEEM will provide key components for the Virginia Class submarine program, a fleet central to the US Navy’s capability and a priority under AUKUS cooperation.

Requests for quote will begin in the first half of FY26, with orders likely to grow as US submarine output rises from around 1.2 boats a year to more than two by 2028.

Northrop Grumman Australia country executive Rob Denney said the agreement underscores the company’s commitment to building resilience in Australia’s submarine industry while linking capable local manufacturers to critical US programs.

Capital Raising Strengthens Growth Platform

The placement issued approximately 10.8 million shares at $1.30 each, with strong backing from major shareholder Perennial and the Miocevich family.

Management said the raise ensures VEEM can pursue new opportunities while maintaining a robust balance sheet.

Proceeds will provide working capital to accelerate defence contracts already in the pipeline and position the company to respond quickly as new requests for supply arise.

By bolstering liquidity, the raise also ensures VEEM can scale operations to meet increasing demand from international partners without compromising its domestic obligations.

Broader Defence Pipeline Gains Momentum

VEEM has also secured Level 1 accreditation with Huntington Ingalls Industries’ Newport News Shipbuilding division, qualifying it at one of the highest supplier levels in the US.

This milestone has already delivered a request for quote, with purchase orders anticipated in FY26.

In addition, VEEM continues to progress major contracts with ASC and BAE Systems, including a $65m agreement with ASC, reinforcing its role as a trusted supplier to multiple defence primes.

Management said these relationships provide a pipeline of opportunities that, when combined with the Northrop Grumman licence, position VEEM at the centre of Australia’s and America’s naval industrial bases.

Accelerated Global Ambitions

Mr Miocevich said VEEM is now well-placed to accelerate its global ambitions.

“We have now met the requirements of this huge market and are starting to reap the rewards,” he said.

“This raise will enable us to capitalise on these developments in the short term and keep the momentum up, fuelling the pipeline of growth.”

The company also appointed David Singleton, former managing director of Austal (ASX: ASB), as a non-executive director to add further expertise in naval shipbuilding and international defence contracting.

VEEM said the combined effect of funding, new contracts and board strengthening support its long-term strategy of expansion and value creation.