Le gouvernement du Québec met en place une nouvelle structure de financement pour appuyer la construction navale
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Government announcement
July 06, 2018

The Government of Québec sets up a new financing structure to support shipbuilding

Le gouvernement du Québec met en place une nouvelle structure de financement pour appuyer la construction navale

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QUÉBEC CITY, July 6, 2018 – As part of the Québec Economic Plan of March 2018, the government provided $250 million for equity investments in Québec shipyard projects. This support will allow the government to:

  • Stimulate shipbuilding in Québec
  • Contribute to maintaining shipyards that are more modern, productive and competitive

This initiative responds to one of the priorities of the Québec Maritime Strategy by the Year 2030 aimed at identifying new financial resources to support Québec’s naval industry.

Considering the importance of the sector in the Québec economy and the associated highly specialized jobs, the government wants to create conditions that encourage both shipbuilding in Québec shipyards and the maintenance of a strong and sustainable Québec maritime industry.

This measure from the Economic Plan allows Québec shipyards to carry out their projects using a more flexible and affordable financing structure, thereby facilitating their profitability through less volatile financing conditions, particularly during construction phases. This also frees up money to modernize equipment, increase productivity, and improve competitiveness for the purposes of obtaining new contracts.

Out of this envelope, the Government of Québec announced today that it is investing $188 million in funding for the MV Asterix conversion project for the Royal Canadian Navy, a project carried out by the Davie shipyard.

The funding of the Asterix project, which was done with this new financing structure, will not only make it possible to free up sums for the modernization of the Davie shipyard’s facilities, but will also increase the shipyard’s productivity and put Chantier Davie Canada Inc. in a favourable position for obtaining new contracts.

Quote:

The shipbuilding industry is booming in Canada. We can be proud of our Québec shipyards, which have the necessary expertise to take advantage of the situation, particularly by building ships with advanced technological features that can navigate in a northern climate.

In the last budget, we announced $250 million for equity investments in Québec’s shipyard projects, in response to one of the Québec Maritime Strategy’s priorities for action aimed at supporting the Québec naval industry.

This innovative financing structure will stimulate shipbuilding in Québec and encourage the maintenance of modern, productive and competitive shipyards, thus ensuring the continuation of quality jobs and valuable expertise in Québec.

Lastly, thanks to this equity participation in the financing associated with the MV Asterix conversion project, we are not only putting words into action, but we are supporting a booming industry and making Davie more competitive in obtaining new contracts.

– Carlos J. Leitão, Minister of Finance.

Key points:

  • The government is acquiring a $188-million stake in Asterix Inc. through Investissement Québec, in exchange for preferred shares.
  • A banking consortium formed namely with JP Morgan and Anchorage Capital completes the financing of the project, for a total value of $488 million.
  • The government’s investment will make it possible to free up sums for the modernization of the Davie shipyard’s facilities, increase the shipyard’s productivity and put Chantier Davie Canada Inc. in a favourable position for obtaining new contracts.
  • The government’s participation consists in an investment with expected returns.
  • This initiative responds to one of the priorities of the Québec Maritime Strategy by the Year 2030 aimed at identifying new financial resources to support Québec’s naval industry.