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Canadian shipbuilding group Davie reports it has finalized the acquisition of the assets of Finland’s Helsinki Shipyard in an effort designed to expand capabilities and expertise in ice-class shipping, especially for the Arctic. The terms of acquisition had been agreed in April but were delayed while financing and approvals were obtained as well as ensuring that the deal would not raise issues regarding the sanctions against Russia due to the war in Ukraine.
Helsinki Shipyard was hit hard by the sanctions as it was working to rebuild its business under new ownership. The yard had received an order from Russia’s mining and metal company Nornickel before the war began for a large icebreaker and the shipyard was looking to grow its historic business with Russian companies. However, Finland’s Ministry of Foreign Affairs turned down an application from the shipyard that was required for Helsinki Shipyard to proceed with the order.
No sanctions had been imposed on the owners of the shipyard, but it was struggling to obtain other contracts as it completed the delivery of the last of three small cruise ships for the exploration market. The final cruise ship was delivered in May 2023. As a result of the challenges, Helsinki Shipyard had been seeking additional work in repairs or superyachts.
Discussions with Davie reported got underway in December 2022 as Helsinki Shipyard was looking for investors. When the news leaked in the Finnish media, they signed an exclusive option agreement in March 2023 and the following month completed the purchase agreement. Davie reports in July it secured a new 50-year land lease from the City of Helsinki for the facilities.
Helsinki Shipyard had been acquired by Russian investors in 2009. A decade later it was acquired by Algador Holdings, a Cyprus-based investment company linked to Russian businessmen Vladimir Kasyanenko and Rishat Bagautdinov, who also own Russia’s biggest river cruise ship operator. In its reporting, Reuters cites sources that said Davie had been working with Finland, the U.S., Canada, and the U.K. to ensure the acquisition would not trigger any concerns related to the sanctions.
The acquisition won critical support in Canada as it moves forward with its National Shipbuilding Strategy. Davie in April 2023 was officially confirmed as the third shipbuilder certified for the program which calls for the construction of multiple icebreakers as the first phase of a renewal of the Canadian Coast Guard fleet. Davie said in April that it expected the deal would provide 20 years of work for the company. Davie builds and maintains icebreakers, warships, and ferries for both government and commercial customers.
“The collaboration established through this acquisition will benefit both the Davie Group and its multiple suppliers throughout Quebec,” said Pierre Fitzgibbon, Québec Minister of Economy, Innovation and Energy. The Quebec government helped make the deal possible by providing C$110 million of financing including a loan valued at C$67 million and a C$43 million equity investment.
“This is the best possible news for Helsinki shipyard, our talented workforce, and our supply chain,” said Kim Salmi, Managing Director of Helsinki Shipyard. “After months of planning, our top priority is to rapidly return this business to what it does best – designing and building world-class ships quickly, efficiently, and cost-effectively.”
Historically, Helsinki Shipyard had built ice-class shipping including large icebreakers. They were also involved in naval work but spent the past few years building the three cruise ships for Swan Hellenic.
Davie did not announce the terms of the acquisition but said “A significant portion of the funds will go to ensuring that the shipyard has working capital while it gets up and running and secures new business.” The operations in Canada and Finland will be separate legal and operating entities but they expect to facilitate the transfer of know-how and provide access to resources.
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