October 31, 2010
Davie gets extension of protection from creditors
Canada's Davie Yards reports that it has obtained an order from the Quebec Superior Court extending the stay of proceedings ordered by the court under the Companies' Creditors Arrangement Act to January 21, 2011. The shipbuilder says the extension will allow it to continue discussions with potential industrial investors, to pursue its efforts to qualify for the National Shipbuilding Procurement Strategy , and to develop and eventually submit a plan of arrangement to its creditors under the CCAA [the Canadian equivalent to U.S. Chapter 11 bankruptcy].
Since the previous Court hearing in September, Davie says that it has received formal expressions of interest from two potential investors in addition to having ongoing discussions with others. Davie has also been shortlisted in the qualification process to become one of the two dedicated yards for building large ships in the NSPS. Davie will go through a benchmarking and capability assessment in the next few weeks related to this qualification process.
The Court also granted Davie an extension of the exemption to hold a shareholders' meeting until March 31, 2011.
According to an October 26, 2010 filing by Court-appointed monitor Samson Bélair/Deloitte & Touche Inc.,vessel construction operations at the shipyard continue to be postponed to to maintain the company's cash resources. With the consent o the monitor, Davies has implemented a working plan to protect vessels under construction from upcoming winter conditions. This work should be completed sometime in November. As of October 26, Davie had 83 employees, 30 of them dedicated to preservation work on ships under construction. "As soon as the preservation work will be completed," says the filing, Davie "is planning to reduce the number of employees down to the minimum number necessary to conduct the affairs of the company."