Minister responds to false claim that Friede Goldman profited from shipyard sale

Industry, Trade and Rural Development Minister Kelvin Parsons responded today to a false claim made by opposition industry critic Ed Byrne in the April 18, 2002 edition of The Telegram, which suggested that Friede Goldman Halter profited from the sale of the Marystown Shipyard.

"These claims are simply false. Friede Goldman did not profit from the sale of Marystown Shipyard," said Minister Parsons.

"Mr. Byrne may have misinterpreted information in a recent filing by Friede Goldman Halter with the United States Securities and Exchange Commission (SEC). Consequently, his comments left the impression that the shareholders of Friede Goldman walked away with $5 million US in profits from the sale," said Minister Parsons.

"The truth is that this $5 million, referenced in the SEC filing, was used to satisfy debts incurred by Friede Goldman Halter, the parent company, during its ownership of the Marystown Shipyard," he said. "This was a legal requirement in order for the sale to take place."

The $5 million was not a profit left in the hands of shareholders. The funds from the sale of assets by a technically bankrupt company were earmarked to satisfy creditors. This included full payment to local Newfoundland and Labrador creditors and other liabilities related to the operation of the yard," said Minister Parsons.

"The Government of Newfoundland and Labrador forgave the $10 million penalty to facilitate the sale and help secure a future for the shipyard. We had little ability to collect this penalty," he said. "The alternative for the province would have been to force the issue, which likely would have resulted in the bankruptcy and liquidation of the yard�s assets. The province wanted to secure a future for the yard - not to destroy it."

We believe the sale was a good deal for the people of Marystown, Burin Peninsula and Newfoundland and Labrador," said Minister Parsons.

The new owner of the shipyard, Peter Kiewit Sons (PKS), headquartered in Omaha, Nebraska, is one of North America�s largest construction and fabrication firms. It brings $650 million in commercial contracts to the yard which will provide steady employment for over two years. This work will provide a solid base from which the yard can grow and diversify over time.

Media contact: Josephine Cheeseman, (709) 729-4570.

2002 04 19                          2:10 p.m.