By Mark Cardwell
On Nov. 19, the Quebec government announced that it had approved the sale of the historic Davie shipyard to Zafiro Marine, a Monaco-based British company that specializes in building offshore vessels for oil and gas exploration.
“We’re very proud to be associated with the rebirth of this venerable North American shipyard,” Alan Bowen, Director of Operations for Zafiro Marine, told the CBC at a press conference in Levis to announce the deal, which was signed Nov. 15.
“I can assure you that our vision for growth at the Davie Yard is based on a long term engagement backed by a solid and realistic business plan that will permit (the yard) to participate in the development of a fast-growing sector – the construction of specialized vessels for the offshore oil and gas industry.”
Another company spokesperson said it plans to build up to seven ships at the Levis yard over the next several years.
Three of those vessels – and the new owners’ first order of business – are high-tech ships for the offshore oil industry that were ordered several years ago by Cecon but were never built.
“The facilities are in excellent condition,” said James Davies, Zafiro Marine’s Chief Financial Officer. “If we were to look at investing in the yard, it would mean a greater capacity and obviously that’s a business case… but we don’t need to spend any money to start production now.”
According to a Quebec government press release, Zafiro Marine acquired the entire share capital of Davie Shipyard Canada Inc. that was owned by Upper Lakes Group.
It has also reportedly agreed to assume nearly $40 million in debt owed to Investissement Québec, the province’s investment agency.
Zafiro Marine’s partner in the deal is CarVal Investors, an international alternative investment fund manager with some $9 billion in managed assets that focuses, according to the company’s website, “on distressed and credit-intensive assets and market inefficiencies.”
The two Quebec cabinet ministers who were present at the Nov. 19 news conference said that about 700 workers will be called back to work at the yard starting in January.
“(The sale) will allow the company to re-launch the construction site, create short-term employment and envisage the future with optimism,” said Élaine Zakaïb, the province’s minister of industrial policy.
The deal is the latest twist in a sad and at times bizarre saga that has seen the Davie shipyard go in and out of receivership and teeter on the brink of bankruptcy – only to be saved at the 11th hour by different buyers – on at least four occasions over the past 20 years.
The latest was Ontario’s Upper Lakes Group, which bought the yard a year ago after talks between the Quebec government and Italian shipbuilder Fincantieri fell through.
But Upper Lakes decided to sell the yard following its failed bid to be selected to build warships and coast guard vessels under the federal National Shipbuilding Procurement Strategy. The contracts were instead awarded to Irving Shipbuilding and Vancouver Shipyards.