Casino cruise ship operator Genting Hong Kong has agreed to sell 3.29 percent of its stake in Norwegian Cruise Line Holdings (NCLH) to third party investors.
The Hong Kong Stock Exchange-listed company announced last week that it has entered an agreement with shareholders Apollo Funds and TPG Fund to sell a total of 15 million ordinary shares, or about 6.58 percent stake, in the Florida-headquartered NCLH.
Underwriters Citigroup Global Markets, Barclays Capital and Goldman Sachs have proposed to offer the shares “from time to time.”
There is no fixed price for the sale, but Genting Hong Kong expects to book a net gain of approximately US$90.1 million from the sale of its 3.29 percent stake, which is controlled by the casino company’s wholly owned subsidiary Star NCLC Holdings Ltd.
Genting Hong Kong said the aggregate market value of the shares it sought to dispose was approximately US$428 million, based on the closing price of the NCLH shares on the Nasdaq Global Select Market on August 10.
“The sale proceeds for the disposal will be used as general working capital and capital expenditure for the Genting Hong Kong group and/or to fund new investments of the group should suitable opportunities arise,” the casino company said in a filing.
The disposal will leave Genting Hong Kong with about 7.84 percent stake in NCLH, which the company said will continue to be labeled as “available-for-sale investment.”
Genting Hong Kong, which also owns 50 percent of Resorts World Manila in the Philippines, has been expanding its cruise business and introduced a three-brand portfolio of cruise lines: Crystal Cruises for the ultra-luxury market; Dream Cruises for the premium market; and Star Cruises for the “contemporary” segment.
Several weeks ago, Genting Hong Kong alerted shareholders that it expected a net loss of between US$200 million and US$220 million in the six months ending June 30. The projected loss is a significant downgrade from the $73.7 million the company lost in H1 2016 but on par with the $502 million loss in FY16. Genting Hong Kong blamed the losses on increased competition for its Crystal Cruises shipboard casino business, rising costs at the German building shipyards it acquired in April 2016, and general depreciation of its new Genting Dream vessel.