March 30, 2009 / 9:27 PM / in 9 years

UPDATE 2-Davie Yards uncertain on continuing as going concern

* Says finalizing a $20 mln private placement

* If placement fails, uncertain to continue as going concern

* Q4 net profit $27.4 mln, rev $36.8 mln

* Says to call back employees laid off on Dec. 12 (Adds background)

March 30 (Reuters) - Canada’s Davie Yards Inc DAV.TO, which posted a fourth-quarter profit, said it doubted its ability to continue as a going concern if a $20 million private placement fails.

The operator of the Davie shipyard in Quebec said it is finalizing the private placement, to fund its operations. However, if the deal fails its available cash and cash equivalents are not sufficient to fund expected cash requirements.

“As a result, there could then be uncertainty as to whether the corporation will have the ability to continue as a going concern,” Davie Yards said in a statement.

The company, which closed operations and laid off 1,100 employees on Dec. 12, to preserve cash, said it resumed operations in the beginning of March and expects to call back all employees by the beginning of April.

Davie Yards said it has a $740.6 million order for five vessels.

“In order to finalize these ships we need all of the close to 1,100 employees we had in December and another 500 more”, Chief Executive Steinar Kulen said.

On Dec. 17, the Canadian government authorized C$380 million in financing and guarantees for the struggling shipbuilder to help it complete the order for five ships from two Norwegian buyers.

Shares of the company closed at 15 Canadian cents Monday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Ratul Ray Chaudhuri)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below