Update Genting HK plans Norwegian Cruise Line stake sale

by **Cals** Wed 05 Mar 2014, 18:38

Update Genting HK plans Norwegian Cruise Line stake sale

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Wednesday, 05 March 2014 14:55

KUALA LUMPUR (Mar 5): Singapore-listed Genting Hong Kong Ltd plans to seek its shareholders' consent for the proposed sale of the company's entire associate stake in US-listed Norwegian Cruise Line Holdings Ltd (NCLH).

In a statement to Singapore Exchange today,Genting Hong Kong chairman and chief executive officer Tan Sri Lim Kok Thay said the disposal was in line with group's strategy to unlock the value of its investment in NCLH.

Trading of Genting Hong Kong shares has been suspended today pending an announcement, the company said in a separate statement.

Lim owns a controlling 57.82% stake in Genting Hong Kong, according to Bloomberg data. Genting Hong Kong in turn is the largest shareholder in NCLH with a 31.35% stake.

NCLH shares' latest closing price stood US$33.83 (RM110.81) for a market capitalisation of US$6.94 billion.

Lim said Genting Hong Kong was asking for at least US$19 a share under the disposal.

Lim said "whether the disposal is made in the open market at market price or through secondary Public Offering(s), the minimum selling price per remaining NCLH share shall not be less than US$19.00".

According to Lim, Genting Hong Kong's wholly-owned unit Star NCLC had last year signed underwriting agreements to sell 11.8% in NCLH.

Yesterday, Star NCLC entered into another underwriting agreement to sell 7.5 milion NCLH Shares via a block trade.

"Upon completion of the block trade, Star NCLC will have disposed of an aggregate of 31,650,000 NCLH shares pursuant to the above disposals and continues to own 56,819,334 NCLH shares, representing approximately 27.7% of the total issued and outstanding NCLH shares.

"If the maximum number of Approved Sale Shares (i.e. 56,819,334 NCLH Shares) are disposed of by Star NCLC pursuant to the disposal mandate, the percentage of the NCLH shares held by Star NCLC will decrease from approximately 27.7% to nil," Lim said.

At NCLH shares' latest closing price of US$33.83, Genting Hong Kong's 27.7% stake in NCLH had a market value of US$1.92 billion.

Lim said it had been Genting Hong Kong's intention to realise profit and cash flow via "realisation of its investment in NCLH".

Lim said the strategy however depended on favourable prevailing share price and market sentiment.

"The company will apply the sale proceeds from the future disposal as general working capital for the group and/or to fund new investments of the group should suitable opportunities arise.

"The directors believe that the future disposal and the disposal mandate are fair and reasonable. The board (including the independent non-executive directors) considers that the future disposal represents a good opportunity to increase the cash flow of the group," Lim said.

Genting Hong Kong's announcement comes at a time when Malaysian-listed Genting Bhd had reported weaker fourth-quarter (4QFY13) and full-year financials.

Genting Bhd said net profit fell 81% to RM483.8 million in 4QFY13 from RM2.48 billion a year earlier. Revenue however rose to RM4.4 billion from RM4.24 billion.

Full-year net profit fell to RM1.81 billion from RM3.98 billion a year earlier. Revenue was higher at RM17.11 billion versus RM16.46 billion.