Davie Yards has entered into a loan agreement with Investissement Quebec pursuant to which Investissement Quebec has agreed to provide Davie with a C$10 million loan.
The loan, which will be funded in the coming days, has a term of 48 months, bears interest at a rate of 9% per annum and is secured against certain claims and accounts receivable of Davie. The loan is provided under the Strategic Support for Investment Program (PASI), administered by Investissement Quebec.
"We are pleased to see the continued support from Investissment Quebec and the Quebec Government through their PASI-program, and we believe that the Company now is significantly closer to securing the long-term activity at the yard," said Steinar Kulen, the CEO of Davie.
In addition, the Company has amended the existing Loan Agreement with Offshore Holding, increasing the Loan by NOK5.9 million (C$1,116,667), all terms according to the original Loan Agreement (as described in press release of September 19, 2008).
Offshore Holding is the controlling shareholder of Davie Holding AS, which holds 71.88% of the common shares of the Company. The loan is a related party transaction for the purpose of Multilateral Instrument 61-101, and the Company is relying on exemptions from the formal valuation and minority approval requirements of Multilateral Instrument 61-101 based on a determination of financial hardship.
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