Highlight Genting HK gets RM5b cruise ship financing

by **Cals** Thu 05 Jun 2014, 20:18

Highlight Genting HK gets RM5b cruise ship financing

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Thursday, 05 June 2014 18:44

KUALA LUMPUR (June 5): Singapore-listed Genting Hong Kong Ltd has secured about US$1.6 billion (RM5.17 billion) worth of term loans from several lenders. The funds will finance Genting Hong Kong's two new cruise ships that are being built by Meyer Werft of Papenburg, Germany.

In a statement from Hong Kong today, Genting Hong Kong Chairman and CEO Tan Sri Lim Kok Thay said the mandated lead arrangers for the two financing facilities were Credit Agricole Corp and Investment Bank, DNB Bank ASA and KfW IPEX-Bank.

Lim said the term loans would provide an aggregate financing of up to the US dollar equivalent of EUR1.2 billion (approximately US$1.6 billion). He said the financing was backed by export credit insurance issued by the German government.

Lim said each loan facility had a 12-year term from the delivery of the vessels. The ships are scheduled for delivery in the fourth quarter of 2016 and 2017 respectively.

“The two new cruise ships to be purpose-built for the Asian market will reinforce Star Cruises’ leading position in the Asia-Pacific and our commitment to develop the region as an international cruise destination.

"We are pleased to have secured financing from our key banks that share our vision and we are grateful for their staunch support," Lim said.

Genting Hong Kong's statement was in conjunction with the signing of agreements between the group and its lenders.

According to Genting Hong Kong's statement, a primary business of the company is cruise related operations under the Star Cruises and Norwegian Cruise Line brands.

Star Cruises, together with Norwegian Cruise Line, constitutes the third-largest cruise operator in the world. They own a collective fleet of 20 vessels.

Genting Hong Kong's announcement today followed a major corporate exercise involving Norwegian Cruise Line Holdings Ltd (NCLH).

In March this year, Genting Hong Kong had proposed to sell the company's entire 31.35% associate stake in US-listed NCLH. The stake was worth US$2.18 billion (RM7 billion) based on NCLH’s latest closing share price of US$33.83 then.

Lim said then the disposal was in line with group's strategy to unlock the value of its investment in NCLH.

According to him, it had been Genting Hong Kong's intention to realise profit and cash flow via a "realisation of its investment in NCLH". Lim said the strategy, however, depended on favourable prevailing share price and market sentiment.