It transpires that the purchase of Davie Yards Inc is more complicated than originally assumed. It may be some time before even the federal government can figure out what has actually happened.
The Monitor's web site for the yard has been unusually reticent in recent months. If you want a long read see their site at:http://www.deloitte.com/view/en_CA/ca/specialsections/insolvencyandrestructuringproceedings/davie-yards-inc/index.htm
particularly the order issued yesterday:http://www.deloitte.com/assets/Dcom-Canada/Local%20Assets/Documents/Insolvencies/Davie-Yard/ca_fr_insolv_Davie_OrderAuthSellAllAsset&VestingOrderExt_072111.pdf
What we do know from that order and press reports at this point:
The Federal Court (which controls the creditor protection of the yard) has accepted a $26.7 million proposal from 7731299 Canada Inc (some part of Upper Lakes Group) to purchase substantially all the assets of the yard. From this sum of money would come payment to the secured creditors ($26mn to the Province of Quebec) and the costs of administering the insolvency. Upper Lakes Group, which owns Seaway Industrial & Marine shipyard in Port Weller (St.Catharines, ON) sold its fleet of Great Lakes ships earlier this summer, so presumably has some cash for this deal.
The deal includes all the land of the yard and the three unfinished offshore vessels at the yard, and the yards debts. I see no mention of the untendered ferries, but I might have missed it.
The yard was previously valued at $6mn to $7mn, but with a potential $10mn environmental cleanup bill.
Also the deal does not include resolution of the dispute with Ocean Hotels, the company that ordered the three ships. They have paid $110mn, some of which may not have gone into the actual building of the ships. That deal has to be reached at some point, but will not hold up the sale as I read the court documents.
The court has given until July 29 to close the deal - so it technically may not be final until then.
Seaway was one of the short listed bidders for the national shipbuilding program, and so was Davie, but Davie was not solvent and could not bid.
Seaway had joined forces with SNC-Lavelin an engineering and project management firm with global reach, and Daewoo, a Korean industrial giant to put in a bid anyway, knowing full well that they could not build some of the ships in their yard. It seems likely that they had in mind partnerning with someone all along. They may even have assumed it would be Davie - who knows.
Last week Fincantieri pulled out of negotiations for the Davie yard. It would be interesting to know why, because $26.7 million is chump change for them. I think they only wanted the combat ships, and realized they couldn't put in a bid in time, so quit.
In any event the Seaway/ SNC-Lavelin/ Daewoo group swooped in. Seaway bought the yard, and the group presumably amended their bid at the last minute.
On the surface this would seem to give the bid a tremendous boost, particularly if they only want to build the non combat ships.
As I state in my latest rant only time will tell what happens, but keep watching the Davie insolvency web site for the latest reports-they will make interesting reading.