Company promises to keep Davie Shipyard afloat

About 700 people will be called backto work atthe Davie Shipyardin Lvis, Que. after the provincial government approved its sale to Zafiro Marine.

On Monday afternoon, the Minister of Industrial Policy laine Zakab said the sale should result in a positive outcome for the Quebec City region.

"Approving [the sale] allowed the company to relaunch the construction site, create short-term employment and envisage the future with optimism," said Zakab.

The embattled shipyard will have to pay back approximately $40 million to the provincial government, which lent Davie money to cover costs while the yard was not operating.

Zafiro Marine, a British company, which specializes in building offshore vessels for oil and gas exploration, plans to build seven ships over the next five years.

"The facilities are in excellent condition," said James Davies, the chief financial officer of Zafiro Marine. "If we were to look at investing in the yard, it would mean a greater capacity and obviously that's a business case... but we don't need to spend any money to start production now."

The Davie shipyard ended operations in February 2010, forcing out about 1,590 employees in the process.

Some of those workers could start heading back to work in January.

Davie has received government help on several occasions. In 2009, the shipbuilding company received $380 million in credit financing and guarantees from the federal government.

The shipbuilder has beenunder creditor protection since February 2010.

In 2011, talks collapsed with an Italian company that had shown interest in buying the shipyard,and left Davie scrambling to find a deal.

The Quebec Superior Court eventually approved a deal to sell theshipbuilder to Ontario's Upper Lakes Group.

But Upper Lakes group decided to sell the shipyard after Irving Shipbuilding and Vancouver Shipyards were selected over Davie to build warships and coast guard vessels.