September 23, 2008
Davie Yards gets another price increase
Lévis, Quebec, based Davie Yards Inc. (TSX: DAV) today announced that Ocean Hotels plc. ("Ocean"), has agreed to a total price increase of US$20 million for the two multipurpose accommodation vessels on order with Davie.
Davie said yesterday that its largest client, Cecon ASA has agreed to a total price increase of US$40 million for the three offshore construction vessels it has on order on order at the yard.
Cecon's agreement was conditional on Davie also getting a price increase from Ocean Hotels
As with the agreement with Cecon, the agreement with Ocean is subject to Ocean receiving refund guarantees from Export Development Canada or similar creditworthy parties and Davie raising no less than US$30 million in equity and/or debt financing. It is anticipated that a significant part of the new equity shall be provided by a strategic investor.
"We now have the strong support of both of our clients in our efforts to strengthen Davie's financial and strategic position" said Steinar Kulen, the CEO of Davie, "If we get the necessary commitment from both the federal and provincial authorities, we are confident that we can secure long term activity at the yard."