Genting Hong Kong may further reduce stake in cruise operator

PETALING JAYA - Analysts are not ruling out the possibility of Genting Hong Kong Ltd (GHK) and Apollo Global Management LLC - two majority shareholders of Norwegian Cruise Line Holdings Ltd - further reducing their stakes in the Miami-based cruise company.

This was after GHK, also a passenger cruise ship operator, and other shareholders proposed to sell 23 million shares in Norwegian Cruise Line, as reported by Reuters yesterday.

As part of the sale, GHK will sell up to 11.5 million shares, reducing its stake in Norwegian Cruise Line to as low as 37.7 per cent.

The analyst said GHK, formerly known as Star Cruises Ltd, might want to crystalise a portion of its investment initially made about 13 years ago.

"GHK had invested US$1 billion (S$1.26 billion) in Norwegian Cruise Line back in 2000 and the company is worth over US$6bil," he said.

Norwegian Cruise Line's initial public offering in January had raised US$447 million, with the company reportedly using the proceeds to reduce borrowings.

Norwegian Cruise Line sold 23.5 million shares, or a 12 per cent stake, for US$19 each, above the marketed range.

Another analyst familiar with the matter revealed that GHK might want to further pare down its stake in Norwegian Cruise Line, which mainly operates in US waters and did not have a strong synergistic business value with GHK's resorts business.

GHK, an 18.4 per cent unit of Genting Malaysia Bhd, started physical works on phase one of its US$1.1 billion Resorts World Bayshore in Manila late last year, a project that is set to be three times the size of the existing Resorts World Manila.

Resorts World Bayshore is GHK's second venture after the existing Resorts World Manila.

When completed, Resorts World Bayshore will hold two upscale hotels with 800 rooms, a grand opera that seats 3,000, a mall and residential towers centred around a casino that is two times larger than Resorts World Manila's.

Both integrated resorts are 20 minutes apart. GHK had invested US$800 million in Resorts World Manila.