Court approves sale of Davie Yards’ assets to Upper Lakes Group

According to Canadian media reports, a Quebec Superior Court judge has approved a sale of the assets of Levis, Quebec, shipbuilder Davie Yards to Ontario’s Upper Lakes Group for about $28 million.

Davie has been in creditor protection since February 2010.

Upper Lakes Group is involved in a consortium with engineering giant SNC Lavalin (TSX:SNC) and the South Korea’s Daewoo Shipbuilding and Marine Engineering. Today’s court ruling meant that the consortium had until 2 00 p.m. today to submit a bid for a major contract under Canada’s National Ship Procurement Strategy.

It would not have been able to participate in the bidding process if a court agreement had not been reached.

Davie Yards subsequently issued the following statement:

[blockquote]

Davie Yards (“Davie” or the “Corporation”) is glad to announce that it has sold its assets to a wholly-owned subsidiary of Upper Lakes Group (“Upper Lakes”), which intends to operate the shipyard in cooperation with SNC Lavalin Defence Contractors (“SNC”) and Daewoo Shipbuilding and Marine Engineering (“DSME”). This transaction, approved by the Québec Superior Court (the “Court”), will allow the Lévis shipyard to submit a bid on July 21st under the National Shipbuilding Procurement Strategy (“NSPS”).

“We have deployed tremendous efforts to close a deal under enormous pressure, and we are happy that we have been able to sell the yard to a credible buyer who, together with its partners, can ensure a viable future for the yard” said the President and CEO of Davie, Mr. Gustav Johan Nydal. He continued, ”this is good news for our workers and for Quebec since an active yard will ensure significant employment and will have a positive economic impact which will be further enhanced if the yard is selected under the NSPS .”

“We would like to thank the Quebec government for its continued support during our restructuring process, as well as our employees and partners for their patience and cooperation during these tough times”, concluded Mr. Nydal.

Davie also obtained today an order from the Court extending the stay of proceedings ordered by the Court to July 29, 2011, the whole pursuant to the Companies’ Creditors Arrangement Act (“CCAA”).

[/blockquote]

July 21. 2011