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December 17, 2008

Canada to provide C$380 million funding for Davie Yards

Stockwell Day, Canada's Minister of International Trade and Minister for the Asia-Pacific Gateway, today authorized Export Development Canada (EDC) to make available up to Canadian $380 million in financing and guarantees for Davie Yards Inc., which recently put its entire 1,100 person labor force on temporary layoff.

The EDC funding is being provided to help the company complete an order for five ships for two buyers. The support is conditional on agreement being reached on the terms and conditions between EDC and Davie Yards.

The Minister's office said the contracts will help maintain 1,100 direct jobs and could add 500 new jobs to the Quebec City region.

"Shipbuilding is an important industry for Canada," said Minister Day. "It plays a vital role in building and maintaining the fleets that provide our maritime security. Our decision today is an extremely important development as we act to ensure that Davie Yards remains a fixture in Canadian shipbuilding and in the region."

"Our government is committed to procure, repair and refit vessels in Canada according to the government's Buy Canada policy," said the Honorable Christian Paradis, Minister of Public Works and Government Services and regional minister for Quebec. "Today's announcement will help ensure that Davie remains a viable contributor to Canada's shipbuilding capacity."

Davie Yards CEO Steinar Kulen called the funding "the catalyst for us to complete our refinancing plan."

"This is good news for our 1,100 employees, who we had to temporarily lay off this week, and for our clients who will get the refund guarantees requested by their banks," added Mr. Kulen.

He said that Davie will start work immediately on the paperwork that needs to be prepared to be able to reopen the shipyard as soon as possible, which is subject to completion of all aspects of the refinancing plan.

"We are delighted with the Minister's recognition of the importance of the shipbuilding industry in Canada, where there is growing potential in offshore oil and gas, and where the Canadian government has specific arctic and defense maritime needs," noted Mr. Kulen. "With these guarantees, Canada is establishing a competitive financing scheme for the Canadian shipbuilding industry

."
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