The Davie shipyard could profit from the war in Ukraine. The Lévis company is negotiating the purchase of an icebreaker builder owned by Russian industrialists in Finland, a country that has turned its back on Russia. Davie hopes that the realignment of European alliances will open the door to juicy contracts and produce spinoffs in Quebec.
Helsinki Shipyard Oy, a shipyard located in the Finnish capital which alone has built 60% of the world’s icebreaker fleet, posted a statement on its website Sunday to announce that Chantier Davie Canada now has an “exclusive option for the purchase of its facilities and that negotiations were underway. The secret negotiations were reported by the local daily Helsingin Sanomat the same day.
In an interview with La Presse on Monday, a spokesperson for Davie confirmed the news, while insisting that no final agreement has been reached and that negotiations remain confidential. “The process is complex and subject to multiple checks and balances,” says Paul Barrett, corporate communications manager.
The discussions are taking place in a context where Finland is distancing itself from its Russian neighbor. Since the invasion of Ukraine, the Finnish government has decided to join the ranks of NATO, which should be done in the coming months. Finland has also closed its airspace to Russian planes and is participating in European sanctions against Vladimir Putin’s regime.
This change of situation has had a significant impact on the Helsinki shipyard, whose ties with Russia go back several years. The facilities were once owned by a Russian state company, OSK, which supplies warships and submarines to the Russian Navy. Vladimir Putin himself had attended some events of the state company in connection with its investment in Finland.
In 2014, after Moscow annexed Crimea and imposed Western sanctions on OSK, the shipyard found itself in serious trouble. In 2019, it was sold to a private Cypriot company whose two majority shareholders are Russian businessmen Risat Bagautdinov and Vladimir Kasyanenko.
Under their leadership, the shipyard continued to export its icebreakers to Russia, its main market. In 2019, investigative journalists from Finnish public television Yle revealed that Vladimir Kasyanenko held a Belgian passport, that he had second homes in Monaco and Finland and that he was a business partner of Viktor Olerski, a former Deputy Minister for Maritime Affairs in Putin’s government.
The new sanctions imposed on Russia after the invasion of Ukraine have been another blow for the icebreaker builder. Although the Helsinki shipyard and its owners are not themselves sanctioned, the company has found itself cut off from its main market. Finnish media reported last fall that the shipyard asked the authorities for a special permit to export an icebreaker destined for a Russian mining company, which it was refused.
A golden opportunity for the Davie shipyard, founded in 1825. The oldest shipbuilder in Canada, owned since 2012 by European investors Alex Vicefield and James Davies, employs approximately 1,000 people in the Quebec City region. His main client is the Canadian government, but he would like to broaden his horizons.
“I have said from the start that I am in favor of this deal because it will secure the future of the best icebreaker expertise in the world and eliminate [Russian owners’] shareholding,” the Finnish minister said. of Economic Affairs, Mika Lintilä, quoted by the daily Helsingin Sanomat.
“I’ve been on a few icebreaker sales trips in North America and I know there’s an interest in Finnish expertise,” he added.
Davie also believes that Finnish expertise could help his facilities in Quebec. The Lévis shipyard is to build seven next-generation icebreakers for the Canadian Coast Guard. A titanic, difficult task, for which the help of Finnish experts, recognized as world leaders, would be welcome.
“If the purchase is completed, the transfer of cutting-edge icebreaker expertise should certainly improve Davie’s ability to deliver the vessels it needs to build in Lévis for Canada on time and on budget. says Paul Barrett.
The spokesperson also believes that the economic spinoffs could be felt in Quebec, if Davie becomes a more important player on the international scene. “We also believe an acquisition could have a multiplier effect on the major economic impact of Davie’s 20+ year shipbuilding program for Canada,” he said.
The Quebec government is following the case closely, according to our information. Davie is in the process of repaying a debt of forty million that its previous owner had accumulated with Investissement Québec. Since 2012, the yard has also received interest-free loans of more than $100 million from Quebec.
The Quebec government’s financial arm also invested $188 million to take a stake in the form of preferred shares in Asterix Inc., a subsidiary of Davie, which was to convert the container ship MVAsterix into a supply ship and lease it to the Royal Canadian Navy.
Stefanie von Hlatky, an associate professor in the Department of Political Studies at Queen’s University and an expert on NATO-related issues, says these negotiations could represent “an interesting case study” in the new context of relations with Russia in West.
“There are still consequences to the fact that some countries that were dealing with Russia will have to find other partners. And as NATO expands its membership, we are definitely going to see some fallout from that and new opportunities. Now, is Canada able to seize these kinds of opportunities quickly? “, she wonders.
She adds that the planned entry of Finland and Sweden into the military alliance will likely increase the prominence given to Arctic issues within NATO. “With two new members, there will really be a bloc of Arctic countries within NATO that will be able to mobilize to assert their positions,” she said.
At Davie, we also believe that the question of the Arctic will be at the heart of the concerns of the allied countries in the years to come. The company is therefore resolutely betting on the market for ships capable of navigating in the icy expanses, and the project to acquire the Finnish shipyard is in line with this vision.
“Helsinki Shipyard has the capacity to build and has built a wide variety of vessels, but is currently focusing on icebreakers and a range of other ice-capable vessels. Icebreakers can and will play an important role in Arctic security, sovereignty and security, which is a growing concern of the NATO alliance,” Barrett said.
