Genting HK’s NCL refiles for Nasdaq IPO

KUALA LUMPUR: Genting Hong Kong Ltd’s (Genting HK) 50%-owned North American cruise liner last Friday refiled its IPO application to list on the Nasdaq Global Select Market to raise proceeds to pare up to some US$272 million (RM818.72 million) debt — a development that may throw the spotlight on the wider Genting group this week.

The registration statement under the name of Norwegian Cruise Line Holdings Ltd precedes a similar so-called “Form S-1” filing related to a planned IPO last October by NCL Corp Ltd, which had since been withdrawn, according to a filing dated July 15 to the US Securities and Exchange Commission (SEC).

It is understood that the listing under the new name is targeted to happen this year, though this could not be immediately confirmed at press time.

Genting Bhd’s chairman and CEO Tan Sri Lim Kok Thay, 59, is chairman of Norwegian Cruise Line (NCL), according to the draft prospectus in preliminary IPO filing, which doesn’t have the pertinent numbers but named UBS Investment Bank, Goldman, Sachs & Co, and Barclays Capital as advisors.

Formerly known as Star Cruises Ltd, Genting HK received a re-rating from analysts in recent months when they saw the earnings growth potential from the Philippines casino resort, Resorts World Manila (RWM) — a venture with Filipino property magnate Andrew Tan-controlled Alliance Global Inc, which is listed in Manila. The name change in October 2009 was intended to reflect Genting HK’s focus away from the sea (cruises) to more land-based to more land-based gaming and leisure ventures like RWM.

“Judging from the restructuring undertaken by the Genting Group, gaming is the key focus of its entire business and Genting HK has been singled out to lead the expansion into East Asia and Taiwan,” Yeak Chee Keong who watches the stock for Kim Eng Securities in Singapore, wrote in a note dated March 14. He sees Macau, Taiwan and Sri Lanka as potential markets for Genting HK.

Besides Genting HK, NCL’s other shareholders are private equity outfits, Apollo Management (37.5%) and TPG Capital (12.5%), which bought their stakes for US$1 billion from Genting HK in 2008.

According to the draft preliminary prospectus, NCL intends to use the net proceeds to redeem up to US$245 million in aggregate principal of two debt issuances, pay up to US$26.8 million in redemption premium for another tranche of notes, as well as prepay a portion of the amount outstanding under its US$750 million senior secured revolving credit facility.

As at March 31, 2011, NCL had US$185 million debt outstanding under its US$750 million senior secured revolving credit facility which bears a rate of Libor plus 4% per annum, according to the SEC filing. At that date, the weighted average interest rate of its borrowings was 4.31%. Its commitment under the credit facility is reduced by US$46.9 million on a semi-annual basis, with the facility maturing on Oct 28, 2015. For the 12 months ended March 31, 2011, it made a net income of US$28.1 million on the back of US$2.09 billion total revenue, the filing showed.

The Lim family controls over 50% of Genting HK directly, while Resorts World Ltd, a wholly owned unit of Genting Malaysia Bhd, has close to 20% stake.

CIMB Research had a HK$3.77 (RM1.45) target price for Genting HK when initiating coverage with an outperform call on April 7 this year, telling clients RWM is ideally placed to grab a bigger slice of the Philippines gaming sector. Genting HK closed at HK$3 last Friday.