Davie Yards Inc.
TSX : DAV
TSX : DAV.WT

Davie Yards Inc.

December 14, 2009 15:29 ET

Davie Yards Moves Forward With Construction of Ocean Hotels Vessels

LEVIS, QUEBEC--(Marketwire - Dec. 14, 2009) - Davie Yards ("Davie" or the Corporation") (TSX:DAV) received confirmation today that its client Ocean Hotels has finalized a US$100 million loan agreement with Export Development Canada ("EDC") for the financing of two Multipurpose Accommodation Vessels contracted at Davie.

"Now that our client has secured its financing with EDC, we will be able to restart construction of the Ocean Hotels vessels, which has been suspended for a long period" said Steinar Kulen, President and Chief Executive Officer at Davie, and he continued; "Those newbuilding projects are important to maintain a good level of activity at the yard, and this is good news for our employees and their families. I am glad that they will have a much better Christmas than last year when we were forced to lay off people temporary".

One year ago, on December 17th, 2008, the Canadian government authorized EDC to make available up to CAD$380 million in financing for Davie. From this facility, Davie's client, Cecon, already has entered into a US$200 million senior secured loan for financing their three Offshore Construction Vessels on contract with Davie. Now Davie's other client, Ocean Hotels has entered into a senior secured loan for US$100 million. In July this year, Davie entered into a loan agreement with EDC of up to US$40 million as pre-funding of the US$ 100 million loan to Ocean Hotels to secure design, engineering and supplies to the project. This loan is repaid in full with the first payment from Ocean Hotels received today. "We are very pleased with the continued support to Davie from the Government of Canada and EDC", stated Mr. Kulen.

Delivery of Ocean Hotels vessels is planned for 2011. Davie total backlog of 5 vessels remains solid at $530 million.

About Davie Yards Inc.

Davie Yards Inc. owns and operates the Davie yard in Quebec. With over 180 years of operating experience and approximately 1700 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.

Contact Information

  • Davie Yards Inc.
    Marie-Christine St-Pierre
    Vice President Communications
    418-837-5841 Ext. 2163
    Cell: 418-655-1084
    mc.stpierre@davie.ca