Austal (ASX:ASB) completed its institutional placement to raise AU$200 million, before costs, at AU$3.80 per share, according to a Wednesday Australian bourse filing.

Around 52.6 million new shares will be issued under the placement, under the firm's placement capacity.

The settlement of new shares will occur on Friday.

The company will use the proceeds to fund the FA2 steel expansion shipbuilding expansion project, along with the AU$50 million sell-down of shares by Austro, which is an entity associated with Austal's former Chairman and current non-executive director, John Rothwell.

Austal's largest shareholder, Tattarang, participated in the placement to its full pro-rata allocation, retaining its 19.6% stake.

The firm's shares fell almost 19% in recent trading on Wednesday.