Norwegian clients also owners at Canadian yard

Photo: Davie Yards Inc.

Shipbuilding interests in Cecon ASA of Norway have secured a large ownership stake in Canada’s already Norwegian-dominated shipyard company Davie Yards Inc., after the yard’s US$20 million share launch triggered an agreed equity buy, writes Scandoil.com.

The deal transforms Cecon from Davie’s biggest client into a 33-percent owner with ambitions of becoming a key offshore construction company. In the convoluted style of Norwegian ownership patterns, Davie’s other client, Ocean Hotels, also has an interest in Davie via its chairman, Tore Enger, founder of Davie’s Norway-based holding company.

Davie’s share issue and Arendal-, Norway based Cecon’s ownership stake mean the latter is now elligible to draw on USD$200 million in construction loans from Canada’s Export Development Corp., a government gesture matched in 2008 by Oslo’s US$7 billion in export guarantees.

Cecon will debt-finance it’s share subscription via US$10 million worth of 12-month senior secured bonds tied to Davie shares and carrying a 25 percent coupon. Most of the bonds were snapped up fast.

Norwegian interest in the storied shipyard has coincided with revived Canadian Federal Government vows to rehabiliate shipbuilding in Canada, although so far Norwegians are dictating the types of ships Davie builds. Cecon’s focus is offshore construction vessels, a current growth industry, and three large vessels of the Vik-Sandvik design VS4220 are under order.

To read the entire article written by WILLIAM STOICHEVSKI on Scandoil.com click here.