Where’s the money from ?

Davie Yard on the St Lawrence River near Quebec City

In previous posts we explore the rebound and challenges of Davie Shipyard. The venerable shipyard, established 192 years ago sits across from Quebec City, on the St Lawrence River. 

The shipyard is projecting a confident air about them, recently delivering a complex offshore construction vessel to European operators, with two more being completed, and two other ships on contract. Running such a capital intensive enterprise such as a shipyard is no easy feat, and certainly requires deep pockets. 

This led me to ask myself; where’s the money coming from?

Most shipyards in the world are somehow, if not fully, funded by the national coffers. Shipyards are a complex machine, and are an important resource to any national economy. Davie has had its share of government money poured into it over the last thirty years. These types of hard financials facts are actually closely guarded secrets in the shipping industry. They deal with a 'whack' of issues, such as international trade and protectionism, and nobody really wants anyone to know just what the figures actually are, as their impacts may be unacceptable socially.

Using my industry knowledge and intuition, and a liberal dose of assumptions, I surmise that the deep pockets supporting this phoenix, that is the new Davie Yard could be the massive, US based, private agri-food multinational, Cargill.

The trail is very hard to follow, but at least at some point CarVal Investors, the investment arm of the US giant, is involved in the Cecon ships, and more. CarVal currently has USD10  billion under management in several portfolios, including Special Opportunities…

CarVal Investors, an independently managed subsidiary of Cargill Incorporated, is a leading global alternative investment fund manager focused on distressed and credit-intensive assets and market inefficiencies.  CarVal Investors directs investments across four asset classes: Loan Portfolios, Corporate Securities, Real Estate and Special Opportunities. 

Davie's parent company is Inocea, and its new management team, I believe, is closely related to Monaco based VGroup. VGroup has numerous ship centric ventures, most notably VShips – a worldwide ship management company - and could be characterize as asset manager.

In 2011, VGroup was bought by OMERS - the Ontario Municipal Employees Retirement Scheme - the bus drivers, city clerks, etc, of Ontario. Here is my blog post about it. 

The trail is quite hard to follow with numerous names involved, which are constantly changing, most are unrecognizable in the traditional marine industry. But numerous indicators would suggest that Cargill, is the primary backers of the yard, with the technical expertise done by VGroup.

Why is this important, it is not really, but you could say... just my curiosity? However as a taxpayer I always like to now what’s going on with national assets such as these. I have been contemplating the impacts of this more recently, as I watch the depression continue, and the resulting “austerity” measures being imposed on the masses. 

Meanwhile a select few have continued, even accelerated, to enrich themselves using these national assets such as shipyards and ports. But this is for another blog entry, later.

Here's an article from Sailings Magazine, speaking to the new management team of Davie.