Davie Shipyard Purchased by Teco Management Group

Published Jun 8, 2006 12:01 AM by The Maritime Executive

The last minute purchase of Canada’s oldest shipyard by a business consortium has obviated the need for a scheduled auction of assets that were scheduled for June 12th. Final details are still being worked out, but the shipyard’s trustee says the deal should close at the end of June. The specifics of the deal were not disclosed.

Teco is known as a refurbisher of ballast tanks, usually while ships are still at sea, but the company now wants to build oil rigs to meet growing worldwide demand. The Davie Shipyard looks to be a good fit. Teco’s Management reportedly wants to build five jack-up rigs at $150 million apiece at the Quebec yard, with construction beginning as early as September, 2006.

Obstacles to the deal were many, including a settlement with the potential liquidator of the yard’s assets; the repayment of millions of dollars in debt; and settlement of a pension-squabble with former employees. However, the potential economic benefits to the local Quebec economy are considered to outweigh the liquidation of the yard. As many as 1,000 jobs may be created by Teco’s acquisition. It remains to be seen whether the new shipyard management can make money where others could not. The Davie Shipyard has been in bankruptcy since 2001.