STAR CRUISES CRYSTALLIZES THE VALUES OF NCLC AND
NCLA WITH UPSIDE OPTIONALITIES
Star Cruises Limited (HKSE: 678) (“Star Cruises”) is
pleased to announce that one of the world’s leading private equity groups,
Apollo Management LP (“Apollo“), with various interests in leisure,
hospitality and entertainment industries, has agreed to make a $1 billion
cash equity investment in NCL Corporation Ltd (“NCL”), a wholly-owned
subsidiary of Star Cruises Ltd in return for 50 percent equity shares
in NCL.
Star Cruises Chairman and CEO Tan Sri K T Lim, welcomed
the new partner and remarked on the opportunities that lie ahead: “This
is truly the start of the most exciting chapter of all. Apollo’s investment
in the common stock of NCL means we have an equal partner who believes
in the business as much as we do as evidenced by the significant financial
commitment being made alongside Star Cruises.
This is a powerful validation of what we have achieved
so far, and of our vision for the future as embodied in the revolutionary
third generation Freestyle Cruising ships (F3 series) we are now building.
I take pride that Freestyle Cruising actually originated in Asia by
Star Cruises and it is now a popular cruising style worldwide especially
in the well established U.S. market.”
President of Star Cruises David Chua stated “We are
indeed pleased with the proposed transaction, particularly as it enables
NCL to put in place a strong capital structure that matches its long
term growth strategy, while Star Cruises Asia will focus on its well
established Asian franchise and its proven track record as the No. 1
cruise line in Asia Pacific.
Equally important is our vast experience in Greater
China after having called more than 10 ports since inception, such as
Shanghai, Dalian, Qingdao, Xiamen, Sanya, Haikou and others.
This will provide us with the opportunities to capitalize
on our inherent strength in Asia.” Steve Martinez, Partner at Apollo
Management LP added, “We are very excited to be forming this partnership
with Star Cruises and are in full support of the existing NCL management
team.
Our investment will help NCL complete its transition
into the youngest fleet in the cruise industry, with a truly original
next generation product with its F3 concept ships. We believe the NCL
brand has significant growth potential over many years to come.”
The proceeds of the Apollo investment will be used to
refinance the existing NCL indebtedness, greatly increasing the liquidity
available to fund a continuation of the dramatic new ship building program
that has seen the introduction of eight purpose-built Freestyle Cruising
ships in just six years.
The NCL owned fleet today (excluding four chartered
ships) stands at 17,600 berths, with another 15,000 berths under construction
and under option, including the new Norwegian Gem due for delivery in
October this year. As part of Apollo’s investment in NCL, Apollo and
Star have entered into a sub- agreement relating to NCL’s U.S. flagged
Hawaii operations under the NCL America brand (“NCLA”), designed to
support the business of NCLA in the near term and permit NCLA time to
realize the benefits of various measures recently implemented to raise
revenue yields and to lower crew turnover and payroll costs.
This agreement provides for a deferred distribution
with a value of approximately $500 million being made to Star by NCL
during 2008, as results of the recent measures materialize.
Taken together with Apollo’s $1 billion payment for
50 percent of the expanded equity, this added element of the transaction
implies an approximate total pre-money enterprise valuation of NCL of
$4 billion, based on $2.5 billion of NCL net debt as at 31 March 2007.
Completion of the transaction is expected early in Q4
2007 and is subject to customary conditions, including regulatory approval,
Star Cruises shareholder approval, and Star and NCL lender consents.
(From Star Cruises)
