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Norwegian Cruise Line Holdings names Del Rio as CEO, Sheehan to leave the company

Norwegian Cruise Line Holdings Ltd., announced that its Board of Directors has named Frank Del Rio as President and Chief Executive Officer. Del Rio succeeds Kevin Sheehan, who has decided to leave the company.

Del Rio is the Chief Executive Officer of Prestige Cruises International, Inc., which was acquired by Norwegian in November 2014. Del Rio, a co-founder of Oceania Cruises, Inc., a subsidiary of Prestige, has more than 20 years of experience in the cruise industry.

"Frank Del Rio has established himself as a leader and innovator in our industry," said Steve Martinez, member of Norwegian's Board of Directors. "Norwegian is poised for continued growth and we are delighted to have Frank lead our team during the next phase of the company's evolution. We also thank Kevin Sheehan for his service to the company. Kevin has built Norwegian into the highly successful company it is today - a company that has reported 25 consecutive quarters of growth in trailing twelve month Adjusted EBITDA coupled with consistent margin improvement. Most recently, Kevin was integral to the Prestige acquisition, assembling a diversified portfolio of brands that spans all market segments in the cruise industry, which we believe puts the company in a strong position for the future."

"It has been a privilege to lead Norwegian over the last seven years. I am proud of what we have accomplished, and take comfort in the knowledge that I am leaving the company much healthier and stronger than when I joined. With the company set for success, I hand the baton off to Frank, a proven leader in the cruise industry," said Sheehan.

"I am excited to begin this new chapter in my long career in the cruise industry," said Del Rio. "I am blessed with a great team at Norwegian, and I am confident that together we can help our company continue to realize great things."

Frank Del Rio has served as Chief Executive Officer of Prestige or its predecessor since April 2007. Prestige, a subsidiary of Norwegian, is a global cruise line operator in the upscale cruise segment. Prestige operates two upscale cruise brands, Oceania Cruises and Regent Seven Seas Cruises, which operate in over 300 ports around the globe. Del Rio holds a B.S. in Accounting from the University of Florida and is a Certified Public Accountant (inactive license).

UPDATE: TUI AG confirms Europa 2 purchase for €278 million

UPDATE: The TUI Group purchases the cruise ship Europa 2, taking a strategically and commercially important investment decision for the Group and its Hamburg-based subsidiary Hapag-Lloyd Kreuzfahrten. Europa 2, TUI AG said in a statement.

"The transaction will replace the previous charter agreement of the ship which was newly commissioned in 2013. The profitability of the Group’s Division Hapag-Lloyd Kreuzfahrten will already be significantly increased in the current financial year 2014/15. The purchase price for the ship totals 278 million euros. It consists of a cash component of around 67 million euros payable to the previous owner and the assumption of 211 million euros of debt.

Fritz Joussen, CEO of the TUI Group: “The acquisition of the Europa 2 enables us to achieve further improvements in the results of Hapag-Lloyd Kreuzfahrten. We expect the transaction to already create positive earnings effects in the current financial year and improve EBITA at Hapag-Lloyd Kreuzfahrten from financial year 2015/16 by around 20 million euros per annum versus the charter arrangement.“

At its annual press conference held in December 2014, TUI had already announced that Hapag-Lloyd Kreuzfahrten was expected to achieve a turnaround in the current financial year – under the terms and conditions of the existing charter agreement for the cruise ship. Following the merger between TUI AG and TUI Travel in December 2014, the long-term growth of the new TUI Group is additionally to be supported by a flexible asset-right business model.

The ownership structure of the existing and new hotels and cruise ships will be optimised in order to enhance the efficiency of operations and increase the value of the assets. The purchase of EUROPA 2 constitutes a key milestone in this context and increases efficiency.

The Hapag-Lloyd Kreuzfahrten Division has achieved an excellent operating performance in the past 18 months. When the initial start-up difficulties following the commissioning of the new ship had been overcome, EUROPA 2 developed and convinced its own clientele in the luxury segment. Occupancy and rates have been


TUI AG, the world's largest tour operator, is reported to be buying luxury cruise ship Europa 2 for €278 million in cash and debt to bolster results at its Hapag-Lloyd Kreuzfahrten, its luxury and destinational market cruise unit. The Hamburg based cruise shipping company has operated the vessel on charter so far.

Europa 2 was built in France in 2013 and it can take 516 passengers. The ship has a gross tonnage of 42,380. It caters for families and targets the luxury segment of the cruise market.

The group is trying to improve results at the loss-making Hapag-Lloyd cruise unit which it hopes will break even in the current 2014/15 business year. By contrast, TUI Cruises, of which TUI AG owns 50%, has been highly profitable.

"The purchase from current owner, Swiss businessman Otto Mihm, was first reported by German daily Frankfurter Allgemeine Zeitung (FAZ), in an advance copy of an article to be published today (Friday). The purchase price is formed of €67 million in cash and €211 million in debt, a spokesman confirmed to Reuters," Travel weekly reports in the UK

FAZ said the deal meant Tui would be able to save charter rates of around €27 million a year and would improve profit in the 2015/16 business year by around €20 million.

Administrator dismisses report saying Deutschland bought by Crystal Cruises

Administrator of Peter Deilmann Reederei, the operator of the German cruise ship Deutschland and of MS „Deutschland“ Beteiligungsgesellschaft mbH, the vessel's owner, has dismissed a media report saying that Crystal Cruises would habe acquired the vessel.

"There was and has not been an offer from US based Crystal Cruises to acquire MS Deutschland or the shipping company (Deilmann) and therefor no agreements with Crystal Cruises," said Reinhold Schmid-Sperber, the administrator of Deutschland's owner and operator, in a statement.

Consequently, he also dismissed reports saying that the vessel would have fetched €50 million in the sale.

However, he said that an investor has signed an agreement to acquire Deutschland, but before the agreement can take effect the investor must meet a number of terms and conditions. The investor, whose nationality and identity would not be disclosed at this stage, is not interested in acquiring Peter Deilmann Reederei, Schmid-Sperber added.

Crystal Cruises buys Deutschland for €50 million – report

Crystal Cruises, the US based luxury cruise shipping company, has acquired the 1998 built German luxury cruise liner Deutschland for €50 million, a German media report says., the wbsite that unveiled the news, said Crystal would not retain the German flag on the ship. Cruise Business Online has not been able to obtain confirmation for the report from Crystal Cruises.

A court in Germany started bankruptcy proceedings of Peter Deilmann Reederei, the ship’s operator and the ship owning company controlled by parties not related to Deilmann on the New Year’s day, Deilmann said in a statement.

The ship was built in Germany in 1998 and its interiors are inspired by great ocean liners at the turn of the last century. However, it only has a few balcony cabins. The ship can accommodate 520 passengers.

Crystal Cruises, which is part of the Tokyo based Nippon Yusen Kabushiki Kaisha (NYK) group, has stated that it wants to expand its current fleet of two ships to seven units. The acquisition of Deutschland would establish the company strongly on the German speaking market.

CBR Odo Commentary - Curtain descends on German one ship operators

Peter Deilmann Reederi, operator of the luxury market cruise liner Deutschland became the third one ship cruise operator in Germany to go out of business in the past 18 months. Both cost and revenue related matters have led to their demise.

In brief, a one ship operation means that all shore based expenses are related to the one ship only; it does not require double the number of office staff to run two vessels instead of two or three.

One ship can only be in one place at a time. This severely limits itinerary planning and it has been particularly damaging to the three German companies in particular as they have been destination-focused operators.

Expansion of larger companies, such as TUI Cruises and Aida Cruises, parts of the Royal Caribbean Cruises Ltd. (RCCL) and Carnival Corp & plc group respectively, has furher added to the woes of the one ship operators by drawing customer focus on larger, modern ships.

The two other companies that left the scene Ambient Kreuzfahrten in Berlin, which introduced the Portuguese owned Azores on the German market. However, sales targets were not met and the company was forced to close its doors, and Passat Kreuzfahrten, whose mid-1970s built Delfin also failed to generate enough revenues to keep the operator afloat.

Deilmann's Deutschland was built in 1998 and it targets the affluent, upper end of the German market. Unfortunately, the ship only has rather few balcony cabins, which puts it in a disadvantage in competition with other vessels aimed at the same market segment.

Deilmann's problems came to the surface in the summer, when its joint managing directors resigned after reporting that the planned sales targets for 2014 would not be met. In the autumn, MS „Deutschland“ Beteiligungsgesellschaft mbH, which owns the ship, sought debt restructuring under court protection, but these attempts ultimately failed.

The ship was put up for sale in the autumn and according to Suddeutsche Zeitung, the Munich based daily, only one strategic potential buyer emerged. This was FTI, the Munich based tour operator, which reportedly offered €1 for the ship. However, the report did not say whether FTI would have assumed liabilities of the ship owning company, which amount to about €60 million, in the process.

FTI already operates the 9,870 gross ton Berlin - which started life as a Deilmann ship in 1980 - and it is one of the very few remaining one ship cruise operators in Germany. The cruise ship business is, however, only part of its wider tour operation activity.

Transocean Cruises, now part of the UK based Cruise & Maritime Voyages (CMV) group, operates the 20,606 gross ton Astor on the German market for about six months per year. However, CMV that will soon have seven ships operates the vessel in Australia and the UK for the rest part of each year.

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