April 21, 2009 / 8:37 PM / in 8 years

UPDATE 1-Davie Yards to issue 244 mln shares in private offering

* To offer 244 mln shares at C$0.10/shr

* Offer price at 35 pct discount to Tuesday’s closing price

* To issue shares to Offshore Holding

* Wellington Management, Cecon to acquire shares

April 21 (Reuters) - Canada’s Davie Yards Inc DAV.TO said it plans to offer 244 million shares as part of a $20 million private placement to improve its financial situation.

The operator of the Davie shipyard in Quebec said the offering, which represents nearly triple the current number of its outstanding shares, will be priced at 10 Canadian cents a share.

On March 30, the company said it doubted its ability to continue as a going concern if the private placement fails. [ID:nBNG436818]

The issue price is at a greater discount to market than allowed without shareholder approval under the Toronto Stock Exchange’s rules, said the company, which is seeking an exemption from the shareholder approval requirement.

The offer price represents a discount of 35 percent to the stock’s Tuesday closing price of 15.5 Canadian cents.

Davie said its client Cecon ASA will acquire 122 million shares, representing 33.1 percent of Davie’s outstanding shares after the offering.

The company will issue 49.8 million shares to its indirect controlling stakeholder Offshore Holding AS to repay the nearly $4.1 million it owes Offshore.

Wellington Management Co, which owns 6.9 percent of Davie’s shares, will acquire 42.2 million shares to raise its stake to 13.8 percent.

Davie appointed Pareto Securities AS and Dundee Securities Corp to act as its financial advisor and agent for the share placement. (Reporting by Ashutosh Joshi in Bangalore; Editing by Anne Pallivathuckal)

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