Davie Yards Inc.

Davie Yards Inc.

July 23, 2009 15:28 ET

Davie Yards Enters Into Loan Agreements With Investissement Quebec Providing for CDN$53.5 Millon in New Loans

LEVIS, QUEBEC--(Marketwire - July 23, 2009) - Davie Yards Inc. ("Davie" or the "Corporation") (TSX:DAV) (TSX:DAV.WT) announced today that it has entered into new loan agreements with Investissement Quebec providing for two loans in an aggregate principal amount of Cdn$53.5 million including a new term loan in the amount of Cdn$21 million and a loan in the amount of Cdn$32.5 million to finance Davie's refundable tax credits for 2009 and 2010.

The Cdn$21 million term loan will be made available to Davie in two installments in the third and fourth quarters of 2009, bears interest at 9% per annum, is repayable in 21 equal monthly installments of $1 million commencing in July 2010 and is secured against all of Davie's present and future assets. The Cdn$32.5 million tax credit loan will be disbursed in proportion to the tax credits Davie expects to receive in 2009 and 2010 with up to Cdn$16.8 million made available in 2009 and the balance, up to a maximum of Cdn$32.5 million, in up to four installments in 2010. This loan bears interest at 9% per annum, is repayable upon receipt by Davie of its tax credits for each of the years 2009 and 2010 and is secured against all of Davie's present and future receivables.

The Investment Quebec loans are part of a previously announced financial restructuring of the Corporation that included price increases from its clients, a private placement of new equity, the refinancing of loans from Investment Quebec and a loan facility from Export Development Canada to Davie's clients.

"With these new loans, the Government of Quebec and Investissement Quebec have demonstrated their continued support for Davie and will provide Davie with additional liquidity to assist it in completing its current order book", stated Mr. Steinar Kulen, the Chief Executive Officer of Davie. Mr Kulen added: "Davie is continuing to ramp up its operations and now has over 1200 employees at the Davie yard plus 400 employees at major subcontractors in Quebec."

About Davie Yards Inc.

Davie Yards Inc. owns and operates the Davie yard in Quebec. With over 180 years of operating experience and approximately 1200 employees, the shipyard is the largest in Canada and among the largest and most sophisticated in North America. The Corporation has a focus on building large and complex offshore service vessels and rigs, and other sophisticated vessels for commercial and governmental use. Its shares are traded on the Toronto Stock Exchange (DAV). News and information are available at www.davie.ca.

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable Canadian securities legislation. These statements include those relating to statements that are not historical facts, and reflect the current intentions, plans, expectations and beliefs of Davie's management ("Management"). Such forward-looking statements reflect Management's current beliefs and are based on information currently available to Management. Forward-looking statements involve known and unknown risks, uncertainties and other factors outside Management's control. A number of factors could cause actual results of Davie to differ materially from the results predicted in the forward-looking statements, including, but not limited to, risks associated with the Corporation's fiscal results, conditions to the completion of the refinancing plan, working capital requirements, major disruptions of production, a downturn in economic conditions, competition and sensitivity to the oil and gas industry and other factors.

Although the forward-looking statements contained herein are based upon what Management believes to be reasonable assumptions, Management cannot assure investors that actual results will be consistent with these forward-looking statements. Certain assumptions underlying the forward-looking statements contained in this news release include Management's assumptions regarding market outlook for the construction of complex offshore vessels as well as the assumptions that new vessels will be delivered on schedule and that the Corporation will attract and retain key personnel in key positions. These forward-looking statements are made as of the date of this release, and Management assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. Readers are cautioned not to place undue reliance on these forward-looking statements. For additional information with respect to certain of these and other assumptions and risks, please refer to the Corporation's Management's Discussion and Analysis for quarter ended March 31, 2009 and the year ended December 31, 2008 as well as the Financial Statements for the quarter ended March 31, 2009 and the year ended December 31, 2008, and the Corporation's Annual Information Form dated March 29, 2009.

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