POLITICS

Aerospace firm gets $15 million guarantee, $5 million loan to chase customers

09/16/2013 03:25 EDT | Updated 11/16/2013 05:12 EST
LUNENBURG, N.S. - The president of a company that makes aerospace components in Nova Scotia says it will receive a $5-million loan and a financial guarantee of up to $15 million from the province to help it bid on big contracts.

Claude Baril of Composites Atlantic in Lunenburg says he doesn't expect the guarantee will be drawn on from the province, which has a 50 per cent equity stake in the firm.

A spokeswoman for the Department of Economic Development says in an email the $15 million is not a traditional guarantee, because the deal would only require the province to pay "up to $15 million in damages" if the department calls earlier loans it has made.

Baril says the loan and the guarantee arrangement will reassure potential customers the company will meet its obligations if it wins contracts worth up to $150 million, which Baril declined to describe in detail.

He says the $5-million loan from the Department of Economic Development would be repayable at market rates and its repayment wouldn't begin until after a contract is secured.

Composites Atlantic is a subsidiary of European Aeronautic Defence and Space Co. NV, which is a European aerospace company that is the controlling shareholder in the firm.