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

Davie Yards Inc.

February 16, 2009 16:57 ET

Davie Yards to Gradually Resume Operations

LEVIS, QUEBEC--(Marketwire - Feb. 16, 2009) - Davie Yards Inc. ("Davie" or the "Company") (TSX:DAV) announced today that it has reached agreements with its clients for new price increases of US$ 35M on its existing contracts. In addition Davie's largest client, Cecon ASA has informed that it has received a US$200M loan offer replacing the lost loan facility with the Norwegian bank DnB Nor. While Cecon completes the loan documentation, Davie has negotiated a US$ 20M prefunding facility which will enable it to gradually resume its operations.

Davie Yards has agreed to amendments to the shipbuilding contracts for Cecon's three vessels and Ocean Hotels' two vessels under construction. Under the terms of the amendments, the clients have accepted price increases totalling US$ 35M in addition to the US$60M that were agreed upon in September last year. Davie has developed a new production plan based on a reopening of operations in the beginning of March, and has reached agreements with its clients for new delivery times for all five ships corresponding with the new production plan.

On December 17th, 2008 Export Development Canada (EDC) announced it would make available to Davie US$ 300M in guarantees and loans. However, Davie's largest client, Cecon ASA lost its US$ 200M loan facility with DnB Nor January 20th this year, and since then, Davie, EDC and Cecon have worked to change part of the guarantee and loan scheme with EDC to a new US$ 200M loan facility for Cecon.

"We are very pleased with the cooperation of EDC, which has issued a term sheet to Cecon for a US$ 200M loan facility to help finance Cecon's new building programme of three offshore construction vessels at Davie", says Steinar Kulen, Davies CEO. "To avoid further delays, EDC has also granted a bridge loan to Davie of US$ 20M, the funding of which is subject to certain conditions and which will be reimbursed upon funding of the US$ 200M loan to Cecon, and Cecon again can start paying their installments being due".

Although Davie is planning to gradually resume its operations upon receipt of its prefunding facility, shipbuilding at the yard will only resume once the US$200M loan is made available to Cecon. Funding of that loan is subject to certain conditions.

About Davie Yards Inc.

Davie Yards Inc. owns and operates the Davie yard in Quebec. With over 180 years of operating experience and approximately 1100 employees, the shipyard is the largest in Canada and among the largest and most sophisticated in North America. The Company has a primary focus on building large and complex offshore service vessels. 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 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 Company 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 Company's Management's Discussion and Analysis for Q3 2008 and the year ended December 31, 2007 as well as the Annual Financial Statements for the year ended December 31, 2007, and the Company's Annual Information Form dated March 25, 2008.

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