Troubled Davie Yards signs loan agreementYard News // September 24, 2008
Davie Yards in Canada says it has singed a loan agreement with Offshore Holding AS for NKr 17.8 million or C$3.32 million, repayable within three years and bearing interest at a rate of 2 per cent per month, to bridge what it described as "an interim cash shortfall situation" during negotiations with clients.
The company also recently announced that it has retained Pareto Securities AS as financial advisors to assist the company in evaluating strategic alternatives, in order to maximize shareholder value.
Davie Yards is understood to have been stuggling with rising costs - as are many shipyard currently building large numbers of OSVs - and, pending negotiations, clients have ceased paying instalments under their contracts.
The companies most exposed to the troubles at Davie would be Cecon in Norway, which has three offshore construction vessels on order - originally for delivery in the the second, third and fourth quarters of 2009 - and Ocean Hotels, which has two VS4004 accommodation vessels on order at the Canadian yard.