The Davie Canada Inc. shipyard in Lévis may soon be able to rehire and complete three offshore oil and gas supply vessels for Cecon ASA of Norway and start work on two Quebec ferries, Montreal Gazette reports.
The offshore supply ships were ordered in 2009 before Davie ran into a financial crisis, a series of restructurings and court protection from creditors. The Export Development Corporation then made a $200-million (U.S.) loan for the Cecon ship order.
Last summer, the shipyard was acquired by a consortium led by Upper Lakes Group, but Davie failed in a three-legged competition for the $35-billion National Shipbuilding Procurement Strategy. It was left with the Cecon completion work and the ferries.
Cecon said Tuesday it will acquire the rights to that loan from EDC, administrator of the Canada Account financings, but the cost for completing the three vessels and settling the deal with the EDC will be $250 million to $270 million U.S. A final binding agreement between Cecon and Davie will be signed in a few weeks.
Cecon’s CEO TerjeTellefsen said in a statement that reaching agreement with the EDC “means we can look forward to completing the project and taking delivery of those state-of-the-art subsea construction vessels and strengthen our reputation as a global provider of subsea services and pipe laying.”
He said Cecon is in talks with an international bank “to provide sufficient financing and payment guarantees to enter into a final contract with Davie.”
Cecon shares rose 55 per cent in Oslo Tuesday.
The offshore supply ships were ordered in 2009 before Davie ran into a financial crisis, a series of restructurings and court protection from creditors. The Export Development Corporation then made a $200-million (U.S.) loan for the Cecon ship order.
Last summer, the shipyard was acquired by a consortium led by Upper Lakes Group, but Davie failed in a three-legged competition for the $35-billion National Shipbuilding Procurement Strategy. It was left with the Cecon completion work and the ferries.
Cecon said Tuesday it will acquire the rights to that loan from EDC, administrator of the Canada Account financings, but the cost for completing the three vessels and settling the deal with the EDC will be $250 million to $270 million U.S. A final binding agreement between Cecon and Davie will be signed in a few weeks.
Cecon’s CEO TerjeTellefsen said in a statement that reaching agreement with the EDC “means we can look forward to completing the project and taking delivery of those state-of-the-art subsea construction vessels and strengthen our reputation as a global provider of subsea services and pipe laying.”
He said Cecon is in talks with an international bank “to provide sufficient financing and payment guarantees to enter into a final contract with Davie.”
Cecon shares rose 55 per cent in Oslo Tuesday.