11/01/2012 10:19 EDT | Updated 01/01/2013 05:12 EST

Quebec government approves Davie Yards sale to British-Monaco firm

QUEBEC - The Quebec government has approved the sale of shipbuilder Davie Yards to British-Monaco company Zafiro Marine.

The office of Elaine Zakaib, the junior economy minister, confirmed Thursday that the government has accepted the recommendation of Investissement Quebec to approve the sale, which is expected to close in about two weeks.

Ontario's Upper Lakes decided to sell the shipbuilding company it purchased with SNC-Lavalin (TSX:SNC) and the South Korean firm Dae Woo last year in order to bid on federal contracts.

Upper Lakes said its ownership became too risky after Irving Shipbuilding and Vancouver Shipyards were selected over Davie to build Canada's next generation of warships and coast guard vessels.

The sale required the approval of the Quebec government because the province had provided $35 million in unsecured credit to Davie.

Meanwhile, the union at Davie says some 900 workers could be recalled by January to complete three ships for subsea oil and gas contractor Cecon, which were put on hold when Davie obtained creditor protection in 2010.

It was also awarded a $120-million contract by the province last year to build two ferries.

Zafiro Marine has a fleet of specialist offshore support vessels working in the oil, gas and renewable energy markets.