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Fincantieri signs an agreement with the French State for the acquisition of 50% of STX France

  • Written by Teijo Niemelä

Fincantieri S.p.A., through its subsidiary Fincantieri Europe S.p.A., signed today a share purchase agreement for the acquisition of 50% of the share capital of STX France from the French State, represented by the Agence des Participations de l'Etat (APE).

The signing takes place after the resolution of the share purchase agreement previously signed between Fincantieri and STX Europe on May 19, 2017 as a consequence of the exercise by the French State of its pre-emption right for the acquisition of the entirety of STX France share capital on July 28, 2017 and follows the signing of the share purchase agreement between the French State and STX Europe.

The acquisition by Fincantieri is subject to the closing of the transaction between the French State and STX Europe and to customary conditions for this kind of transactions.

The agreement provides for a purchase price of euro 59.7 million for Fincantieri, which shall be paid through available financial resources.

The signing is part of the agreement announced on September 27, 2017 by the Italian and French Governments regarding the future shareholding structure of STX France. Such agreement envisages the participation of Naval Group as a shareholder of STX France and represents an important first step towards the creation of a future alliance in both cruise and military naval sectors.

Pursuant to this agreement, upon closing the parties will also execute the shareholders agreement and the stock lending agreement relating to 1% of the share capital of STX France which will be lent by APE to Fincantieri upon terms and conditions already agreed between the parties.

After the closing of the transaction, the shareholding structure of STX France will be the following:
– Fincantieri (Fincantieri Europe S.p.A.): 50.00% (an additional 1% will be borrowed from APE)
– French State (APE): 34.34% (of which 1% to be lent to Fincantieri)
– Naval Group: 10.00% (or 15.66% if the employee ownership plan referred to below or/and the participation of a group of local companies cannot be implemented at the same time)
– STX France employees: up to 2.40%
– Local companies: up to 3.26%

The Board of Directors of STX France will be composed as follows:
4 members appointed by Fincantieri (including the Chairman and the CEO)
2 members appointed by the French State
1 member appointed by Naval Group
1 member appointed by the employees
The Chairman of the Board will have a casting vote.

With more than 150 years of history, STX France is a global player in maritime construction. Based in Saint-Nazaire, on the French Atlantic coast, the Group operates one of the most modern shipyards in the world and has great expertise in the design and engineering of the most complex and innovative ships. STX France has approximately 2,600 employees and a network of more than 500 subcontractors. In 2016 it generated revenues of approximately euro 1.4 billion.

Through this industrial partnership Fincantieri strengthens its leadership on the global market. The perfect complementarity of Fincantieri’s and STX France’s cruise activities and products would allow the two companies to serve all the clients and end-markets and to generate value not only for the shareholders, but also for the employees and the respective subcontractors’ networks.

Any change to the forecasts envisaged by Fincantieri 2016-2020 Business Plan will be evaluated and disclosed in accordance with current regulation.

Genting Hong Kong says Star Cruises, Crystal Cruises notice toughening competition

  • Written by Kari Reinikainen

Genting Hong Kong, the listed parent of the luxury cruise brand Crystal Cruises, Asia-Pacific focused premium market unit Dream Cruise and the Asia-Pacific focused Star Cruises contemporary market brand, said that the first and last named companies are facing the effects of toughening competition.

“Crystal Cruises faces significant competition in 2017, as competitors have launched new luxury ships, leading to approximately 16% increase in berth capacity in the luxury sector,” Genting Hong Kong said in a statement.

“The arrivals of new and large ships of competitors have caused smaller and older ships to relocate to ports where Star Cruises ships are positioned, creating downward pressures on occupancies and yields,” Genting Hong Kong said, adding that the situation is expected to improve as competitors have announced approximately 18% reduction in capacity by the end of this year.

Dream Cruises, launched slightly more than a year ago is performing well with improving occupancies and net yields in both the Hong Kong/Guangzhou and Singapore markets, Genting Hong Kong said.

One off items to narrow Genting Hong Kong loss to $240 million to $270 million in 2017

  • Written by Kari Reinikainen

Genting Hong Kong, the listed company that owns Crystal Cruises, Dream Cruise and Star Cruises, will report a much reduced for 2017 than the previous year due to one off items, the company said in a statement.

The group expects to record a consolidated net loss in the range of $240 million to $270 million for the year ended 31 December 2017, as compared to a consolidated net loss of US$537 million, excluding the share of results of Travellers, for the year ended 31 December 2016, Genting Hong Kong said in a statement.

The reduction in the forecast loss is mainly attributable to a one-off gain of $205 million in respect of the sale of Norwegian Cruise Line Holdings Ltd.’s shares and The Star Entertainment Group Limited’s shares and the absence of an impairment on NCLH shares of $305 million in 2016.

However, start-up losses in the Dream Cruises brand for World Dream arrived in Hong Kong and the re-positioning of Genting Dream to Singapore in November 2017, Crystal Cruises brand extensions in river cruises and the launch of AirCruises all weighed on the accounts.


Carnival orders second 180,000 gross ton ship for P&O Cruises

  • Written by Kari Reinikainen

Carnival Corporation & plc said it has signed a shipbuilding contract for a second 180,000 gross ton next-generation cruise ship for its P&O Cruises brand in the UK with Meyer Werft GmbH in Germany. The ship is scheduled to be delivered in 2022.

"This vessel will be the largest cruise ship to be built specifically for the British market, and will accommodate approximately 5,200 guests. Sister ship to fellow P&O Cruises ship due for delivery in 2020, the vessel will feature Carnival Corporation(&plc')s exclusive “green cruising” design as one of the first generation of cruise ships to be powered by Liquefied Natural Gas (LNG) both while in port and at sea, which will significantly reduce air emissions with the shipping industry’s most advanced fuel technology," the company said in a statement.

The new ship is part of Carnival Corporation & plc's ongoing fleet enhancement strategy with 19 new ships scheduled for delivery between 2018 and 2022, creating excitement in the vacation market and continuing to exceed guest expectations while accelerating demand for cruising, the fastest growing segment in the vacation industry.

In total, Carnival group has agreements in place with leading German and Finnish shipbuilders Meyer Werft and Meyer Turku to build eight LNG-powered cruise ships across four of its 10 global cruise brands with delivery dates between 2018 and 2022.



RCCL to pay $80 million in bonuses to staff, excluding corporate officers

  • Written by Kari Reinikainen

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, said it would pay a total of $80 million in bonuses to its 66,000 staff after reporting record results for 2017.

“After announcing RCCL had achieved its three-year Double-Double goal of doubling earnings per share and recording a double-digit return on invested capital, the company today told employees they will be thanked for their contribution with individual salary bonuses of 5%,” the company said in a statement.

"Exceptional results require exceptional effort," said Richard D. Fain, RCL's chairman and CEO. "Reaching the Double-Double required remarkable focus and discipline from our employees, and they delivered. "Employees will receive equity awards equal to 5% of their 2017 salaries in an $80 million programme called the "Thank You, Thank You Bonus."

The awards, which vest over three years, will go to all employees – shipboard and shoreside, full-time and part-time, domestic and overseas. Corporate officers, however, are excluded. In addition to the 5% equity awards, the company will contribute to the Crew Welfare Fund for upgrades to crew living and recreational areas.