Davie Yards secures industrial investorYard News // December 10, 2008
Davie Yards in Canada has announced that that it has signed a Letter of Intent with a new company owned by Bergen Group in Norway and Davie's client Cecon, with the intention that the new company invests US$10 million in the company by way of an equity investment, and a separate management agreement with Bergen.
Bergen will control 51 per cent of the voting shares in the new company, which will invest USS$10 million in Davie in common shares at a subscription price of CDN$0.10 per share in order to become an industrial partner with Davie and to secure co-operation between Bergen and Davie.
The new company's investment of US$10 million is subject to Davie securing refund guarantees for the vessels under construction.
Davie intends, subject to market conditions, to offer its existing shareholders the opportunity to subscribe for additional common shares on the same terms by way of a rights offering which will be launched upon completion of the restructuring initiatives.
The investment will be another vital part of the company's financial restructuring plan and will, together with the earlier agreed price increases with its clients and the financial support from Investissement Quebec, provide most of Davies capital requirements.
Davie will also enter into a management agreement with Bergen whereby Bergen can provide Davie with shipbuilding knowledge and expertise on building offshore vessels.
Bergen will be offered a seat on the Board of Directors of Davie, and Board member Anne Stottum Stenseth will resign to accommodate this.
"We are pleased with the assistance offered from the Bergen Group. Bergen can contribute with leading shipbuilding and offshore vessel expertise and know-how and can bring Davie closer to the international shipbuilding and offshore oil environment", said Steinar Kulen, the CEO of Davie.