Genting HK to pay US$550 mln for Crystal Cruises

Mar 04, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck, World  

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Casino investor and casino cruise ship operator Genting Hong Kong Ltd said it has reached a deal to acquire the entire equity interest in Crystal Cruises Inc, a Los Angeles, California-based operator of luxury ships. The deal will be done via a Genting HK subsidiary, Crystal Acquisition Co Ltd, the Hong Kong-listed suitor firm said in a filing on Tuesday.

Genting HK is acquiring Crystal Cruises and its subsidiaries for a total consideration of US$550 million, “subject to adjustment by an estimate of a number of financial matrices”. The final price, after any adjustment, shall not be more than US$600 million, the company added.

Genting HK, a unit of Malaysian conglomerate Genting Bhd, said it expects to fund the deal with “a combination of the company’s existing cash on its balance sheet and bank facilities, if required”.

The deal is contingent on the completion of a planned restructuring of Crystal Cruises, which aims to convert from a corporation to a limited liability company and take ownership of the two cruise ships it operates.

Crystal Cruises operates ships to various destinations including in Africa, Asia, Australia, the Mediterranean, Northern Europe and South America. It is currently owned by NYK Group Americas Inc, a subsidiary of Tokyo-based Nippon Yusen Kabushiki Kaisha.

The deal includes the acquisition of International Cruise Management Agency AS and International Cruise Services Ltd, companies that operate as providers of crew personnel services for Crystal Cruises.

Crystal Cruises operates two vessels; the Crystal Symphony and Crystal Serenity (pictured), with a capacity of 922 passengers and 1,070 passengers respectively. The two vessels have a combined estimated value of US$300 million, according to Tuesday’s filing.

Crystal Cruises generated US$8.9 million in net income last year, a turnaround from the US$45 million net loss recorded in 2013, according to the filing.

Genting HK operates casino facilities in its Star Cruises-branded vessels and is a joint venture partner in two Philippine casino resorts. The company on Tuesday said that the investment in Crystal Cruises “presents an excellent opportunity for the group to expand its cruise business worldwide”.

“The acquisition will enable the group to take advantage of the growing global demand in the luxury brand market and maximise its revenue and profitability potential through the proposed addition of a third new vessel for the Crystal Cruise brand,” it added.

The company in December announced it would acquire Exa Ltd, an investment company with interests in luxury yachts and submersibles, for US$37.9 million.

In January 2013, the firm diluted its equity stake in another cruise firm, Norwegian Cruise Line Holdings Ltd, as a result of an initial public offering of ordinary shares in the entity.

Genting HK last month said it expected its profit for 2014 to fall 36.7 percent from the previous year. The results are expected to be announced this month.

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